One of the very possible risks is: What if the seller refuses to sell property at the end of lease term? You think why seller would do that since he was ready to sell property to start with. This can happen especially if the market turns rosy and turns on top of its head to better price than the proposed deal with you. There is a good chance that he might even sell his property directly to some investor without you knowing about it! All the rent money that you pay now is collected by the new owner, and you can do nothing about it!

It is very important how you do your paperwork and agreement with your seller to start with. Also if the OPTION is not properly recorded in the county then you are putting yourself into big risk, because no one in the world will know that you have an option to buy this property. Proper recording of option and subsequent transactions are very important to secure your interests. The mortgage company and all other related parties are likely to be aware of your involvement in the property if the original owner is trying to sell the property without keeping you in loop.

This is just one of the potential risks associated with Rent-to-Own deals. I will talk more about such risks in next email. What is important to know is, risk like this can be avoided with proper precautions, strong paperwork and timely recording of OPTION.

http://www.locatere.com/RentToOwn/RentToOwnConsulting.aspx

It is very important to have an expert work side by side with you, if you are doing this for first time. Not only it will save your time but also you have an expert who can look over all parts of the deal before you commit your next real estate investment.

This entry was posted on Tuesday, February 24th, 2009 at 5:57 am and is filed under Rent To Own. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.