There is a growing trend towards the rent-to-buy investment strategy in Los Angeles, with two approaches. Some investors are locating viable tenants and then finding a property well suited to their needs, though their profits may be smaller, while others find great deals on the Los Angeles market and then locate their tenants.
Unlike flipping, a rent-to-buy strategy increases profits by delaying the closing and collecting the final proceeds from the sale. With an option, tenants are willing to forsake their downpayment for the option of trying out the property, much like leasing a vehicle. However, with a purchase agreement, tenants are legally obligated to complete the purchase at the end of the lease period. So read on as we explore rent-to-own, one of the hottest trends for Los Angeles real estate investors.
Before you market your rent-to-own property, Los Angeles real estate investors must ensure you are within all federal, state, and local guidelines and use a contract approved by an experienced attorney. You should also seek tax advice to learn of any impact your agreement may have on your income. When you team up with a professional investor, like those at Jennifer Buys Houses, you’ll have access to our full-service team of industry providers, including attorneys, to counsel you.
There is typically little to no turnover or vacancy costs when Los Angeles real estate investors choose the rent-to-buy sales method for their property. However, they should create a system for screening and follow through with each process step for tenants in every real estate market sector, including rent-to-own. In addition, carrying out your due diligence during your screening process can help you avoid the need to take legal action. Often, these would-be homeowners need time to correct issues with their credit and find the perks of rent-to-buy agreements outweigh the costs, so you’ll need to consider each candidate individually. As the number of millennials buying homes increases, and while they are affluent, many choose an option, holding out to buy as they watch the market. Professional investors like those at Jennifer Buys Houses work with a property management team that can handle your marketing, screening, and tenant application processes while you relax and enjoy your passive income.
The advantages of rent-to-own for Los Angeles real estate investors are twofold when it comes to the price of the investment property. Firstly, you can seek out property that is underpriced for the market due to the need for minimal repairs. Then, with the completed property rehabilitation, you can set your asking price above market value. After all, you’re holding the property off the market and taking the risk market prices will jump unexpectedly, and you’ll be legally bound to sell below market value. Additionally, depending on your agreement, you’ll receive monthly cash flow from the rental income, which investors can also set slightly above market rates, along with additional funds towards the down, depending on your agreement. Let a professional investor like those at Jennifer Buys Houses help you run the numbers and ensure you’re buying the best property in the best location for the best price. And when you work with a professional investor from Jennifer Buys Houses, you’ll never pay commissions, closing costs, or hidden fees.
With the option strategy, rent-to-own Los Angeles real estate investors have plans that delay collecting the final proceeds and finding new tenants, keeping all non-refundable deposits and any monthly payments towards the down. Should tenants fail to attain financing with a purchase agreement, you will be carrying the unexpected costs of holding the property and will delay your plans for your profits until you retain new tenants.
Another benefit of the rent-to-own agreement for Los Angeles real estate investors is the minimal time and expense invested in the property once you have a tenant who will agree to maintain the property as if it were already their own, dependent upon the terms. While there is little need for management with rent-to-buy agreements, it is still essential to monitor the property. Working with a professional investor like those at Jennifer Buys Houses and our in-house property management team means you can relax and leave it all to us, knowing we’ll keep an eye on your investment and help your tenants should the need arise.
Rent-to-own success is easy for Los Angeles real estate investors working with the seasoned pros at Jennifer Buys Houses. Talk to one of our investment experts at Jennifer Buys Houses today with no obligation and find out how you can get started on the path to financial freedom with Los Angeles real estate investments. Let the professional investors at Jennifer Buys Houses help you understand your options and guide you past any hurdles that may be standing in your way. We can help you find the perfect property and don’t forget to ask about our current inventory of the best rent-to-buy properties available in Los Angeles. Call Jennifer Buys Houses at (424) 242-9304.