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San Diego downtown real estate broker

Bob Schwartz, CRS, GRI 

Certified Residential Specialist



San Diego, California 92101

Telephone - Cell:
(619) 300-8819

(619) 229-0048

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Using A Rent To Own Strategy In A Down Real Estate Market


Investors looking to make a killing in our current real estate situation (huge recession), should consider the term, “rent to own.” Renting to own allows people the opportunity to rent a home with the intention of purchasing it without having to make a large down payment. This way, investors can buy foreclosed homes and offer the “rent to own” feature.

There are more foreclosures on the market today than ever before. You used to only see foreclosures in shattered areas but now they are everywhere. Even in upscale residential neighborhoods, you can spot foreclosures. The foreclosure is usually vacant and has been for some time. The bank took over the property when the owners were unable to pay the mortgage and is now in the process of selling the property.

There truly has never been a better time to purchase foreclosures than right now. Because the interest rates are so low and there are so many homes on the market, you can get some real good deals. Before you buy a piece of property, however, you should be sure that you know your market. You should make sure that the area in which your property is located is an up and coming area and not blighted. It may be tempting to purchase a home for a few thousand dollars in a blighted area, but it is a poor investment. Not only will you have a hard time selling the home, but you will also have a tough time getting renters who will pay you on time.

If you invest in a foreclosure in a solid area, you can give people who are interested in owning the home but do not have money for a down payment, an opportunity to rent to own. They will pay you rent each month and a part of this money can go towards the down payment. You give them a certain amount of time to come up with the amount of money that they need for the down payment as well as the mortgage. This is usually a year or two. If they meet the terms with the terms of the rent to own agreement, they get the house sold to them for the agreed amount. You have made a few dollars in the investment and the renter is now a homeowner.

If the renter does not follow through with the agreement, then you have a choice to extend the rent to own agreement or sell the home to someone else. The good thing about the rent to own program for landlords is that if a renter is potentially considering buying a home, they are more likely to take good care of the home. One thing about renting property to tenants that landlords do not like is the fact that many of them do not take care of the property. If you use the rent to own strategy in this down real estate market, you can get tenants who truly want to own the property and who have more of a motivation to make their payments on time. The most important aspect for this plan to work correctly is to have a local real estate attorney draft your rent to own agreement! This is NOT an choice, but, a necessity in this sort of agreement! If done correctly, whether you sell the home or not, you still make money with your investment.


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