Renting a House to Own

I was buying a house and two lots in a small town. Since the house was two small for my kids and me, I bought a double wide mobile home to put it on the second lot and decided to sell the house. This young man I'd known all of his life had a growing family and his wife wanted to buy the house and lot. The problem was that although he had a good job, they had no down payment. We agreed on rent to own.

The first mistake I made was agreeing to a monthly payment of less than fifty dollars over the mortgage payment. The second was agreeing to let them get four months in arrears before taking the house back; this meant that it took several months to accumulate enough in the bank to pay any notes they misssed which essentially meant paying up to four notes out of my own pocket. The biggest mistake, though, was in drawing up the contract myself wihout consulting an attorney or a real estate professional.

This isn't to say that they didn't do their best because they did, but unforseen expenses happen especially with small children and there were difficult months. I was a teacher and simply couldn't afford two mortgage payments.

My advice to anyone considering selling rent to own property is: 1) consult an attorney and a real estate professional 2) don't let sentiment interfere with protecting yourself i.e. make sure that the payment is large enough not to leave you in a bind and 3) get at least one percent down to pay the note if they get in arrears before the payments have time to accumulate. The best advice though is not to get involved in rent to own if you don't own the property free and clear.