Do you really need equity in order to sell your home, "Rent to Own?"
The short answer is no - you do not need any equity.
The reason is because, you are:
For these reasons, you do not need any equity when you sell, "Rent to Own" and in fact, you may even be somewhat "under water" when it comes to owing more on the loan than the house is even worth.
That's OK too, because the solution in that case is to extend the lease term out even longer. Most lease terms are from 1 to 3 years, so, if you owe more on the home than it is worth, simply extend the lease term out even longer, and allow the market to correct.
Granted, markets don't always, "correct" in your favor, but it may. The truth is, when you sell your home, "Rent to Own" (A.K.A. Lease with the Option to buy), neither you or the buyer has any control over your home's market value.
Both you and your buyer will be making the best "educated" guess you both can make as to what direction the market will go in. Sites like HousingPredictor.com can sometimes help you in making this "educated" guess, but again, the market itself has the final word on this - not you or the "end" tenant-buyer.
The fact is, most home owners that want to sell their home, do not want to sell, "Rent to Own" and instead, would prefer to get paid cash today. But, if a home owner does not have any equity, and needs to get "mortgage relief" meaning, they've got to:
...selling, "Rent to Own" can be a great option that will give them that relief they're searching for.
When structured correctly, would-be landlords, no longer have to landlord and can create a "hands-free" rental property with the potential upside of selling in a few years v. having to fix leaky toilets and roofs. No fun.
In fact, you as the home owner, can get a 2-3 times the security deposit, called an "Option fee" and make it non-refundable from the start. That way, if the tenant-buyer decides they don't want to buy the home, you keep the Option fee, you get the house back, and you can simply place it back on the market again and get another non-refundable Option fee from the next tenant-buyer.
Want to Learn More About How to Sell Your Home, "Rent-to-Own" So You Can Get Your Full Asking Price and Pay No Commissions?
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