July 13, 2024


Mad about real estate

Real Estate Investments During a Recession: the Rent to Own Strategy

Are you looking for a successful investment strategy that will help you make money in real estate during this time of recession? If so, you should consider the “rent to own” strategy. This strategy of real estate investing involves purchasing foreclosed properties or properties that are in the process of foreclosure. You then rent these properties out to their former owners or new tenants with the agreement that they will eventually buy back the property.

The rent that you receive from the tenants will pay your mortgage payment, your taxes and insurance. It will also have to be sufficient enough to set some aside to be used by the tenants as a down payment when it comes time for them to purchase the property. You should agree on a purchase price and date ahead of time. Remember; the price should be more than what you paid for the home since the goal is to make a profit.

The contract that you enter into with the renters will give them a certain amount of time to secure financing, come up with the down payment and make all arrangements to take over ownership of the home. During this time, they will continue to pay rent. If they cannot take over the home as agreed, you can renegotiate the contract or evict them and look for new tenants.

This is not a new strategy; it is just getting increased attention due to the real estate recession. The “rent to own” strategy is a great way to help people stay in their homes and make some money in the process. You can help them reduce their monthly payment by refinancing the home at a lower rate. If they can recover financially and purchase their home from you, they can stay in their family home and own it once again.

The “rent to own” strategy is better than renting random properties. For one, you know that your tenants will take care of the property as if it was their own. After all, who wants to trash a home that they want to buy? This cuts down on costs and losses associated with renting out to tenants who do not take care of the property.

If you want to buy a home for peanuts, there has never been a better time. Interest rates are also at an all time low. Take advantage of these two facts and start your own real estate empire using the “rent to own” strategy.