RentToOwn-HouseFinder.com

How to you price a home for rent it out and also for "rent-to-own" option?

Assumes I know the current value of the house, current interest rate, Home taxes, home owner fees etc. You can assume house price to be $100,000, taxes are 1.75% of the value, current interest rate is 7.25%. Home owner fees are less than $100.

Public Comments

1. first you value the house for the purchase price and then for current market value. Compare the amortization for both, and evaluate the rental market for the area. Many real estate web sites have rental properties listed too. Then you must also prorate your related expenses into the rent: taxes, insurances, core utilities, etc.
2. In general, your rent should simply be whatever the market will bear. Coming from a mortgage company, we can only use any amount in excess of "market rent" that was paid during the lease period as being able to apply to the buyer's equity or down payment on the home. For example, let's say market rent in your area is $1200 (this will be certified by the appraiser). If the buyer/tenant paid you $1500 per month in rent, you could apply $300 per month towards his equity or down payment when he completes the purchase. I know everyone wants to set their rent based on what their own expenses are, but that's not reality. You won't get higher rent than the overall market just because your expenses are higher. Best thing to do is scan the local newspapers for rental listings, look at craigslist.org, and any other place you can find where rentals are posted. This should give you an idea of what people are getting for rent for their properties. You just need to find the closest "comparable" properties (like 2 bedroom, 2 bath, how many square feet, etc...), and set your rent accordingly.
3. Consult your local Realtor. He or she will be able to analyze the lease market in your area to determine the market rent. Also, rent to own may not be legal in your state, so make sure your Realtor advises you on this point.