Comments on: A Buyer’s Guide to Rent to Own Homes

By: Barb

Barb — Sat, 19 Nov 2011 02:02:26 +0000

Hi, I really need some help, my husband and I had purchased a home in May of 2010, well we thought we were home owners, come to find out we are rent to own. The company we went through told us that we are first time homeowners and that we can receive the $8000.00 tax credit, we received this credit and gave it to the company. This did lower the purchase price of the home, but come to find out the deed is not in our name. My question is if we move do we have to pay back the whole $8000, are just a percentage of it?

Help!!!!!!!!

By: DR

DR — Thu, 29 Sep 2011 10:03:40 +0000

Bill, the first thing I’d suggest is consulting a tax professional. I’m no tax expert. Having said that, the tax consequences depend on the terms of the deal. Is there an upfront payment to lock in the purchase price? Does a portion of the rent go to the down payment on an eventual purchase. I believe that the tax consequences ultimately will hit when the sale occurs, not during the rental period. But again, they should consult a tax accountant.

By: Bill

Bill — Wed, 28 Sep 2011 18:50:11 +0000

DR -

I have a client who would like to purchase a rental property and rent it out to their son. If they were to convert this into a rent-to-buy arrangement, what are the potential tax consequences?

By: yoyo

yoyo — Sun, 27 Mar 2011 03:44:36 +0000

You are 1 year too late for the homebuyer tax credit.

By: Tiffany

Tiffany — Wed, 09 Mar 2011 01:44:00 +0000

I am in a situation where I was in a lease with option to buy home and the SELLER needed back into the home due to financial/legal difficulties. We were given a date they needed to be in by and told if we wanted to buy the house now we could if not then they needed back into the home. We were not in a position to buy the home at that time and had 2 more years left on the contract but agreed to move out (due to the selling price of the house compared to homes being sold around it was significantly higher) . In this situation what happens to the option money that we put down? Should it be refunded since they broke the contract?

By: Angela

Angela — Tue, 08 Mar 2011 21:24:14 +0000

We have a possible Lease to Own situation. The owner does not owe anything on his property and has retired and bought a property to move to accross the State.

If they do not own on the property then this would put us in a better position because more money would go towards paying down our purchase price, I expect. What type of percentage would you expect or reccomend should go towards the down payment? What type of percentage would the owner fairly take, appreciation?

Could a Seller Finance Contract Deed be a good option? I am a little confuse on how that would work.

Thank you for your time!

By: Shannon

Shannon — Wed, 09 Feb 2011 19:27:57 +0000

My father has a house that my husband and I are interested in purchasing, but won’t have the down payment. Although we do have excellent credit, we just want to pay off some other obligations before starting to save for a down payment. I know my dad would be open to other options, would you recommend the lease to own, my dad acting as the lender, or a installment land contract? Additionally, what type of outside party would we need to facilitate this, if any (i.e. real estate agent, attorney, etc.)?

Another factor to consider is that because my husband has been overseas with the military, we could (and would love to) still qualify for the first time homebuyers credit if we complete our “purchase” by June. If we could qualify for that, then we would be able to have the down payment available by the time we received our 2011 tax return. Not sure if that would change your suggestion.

Thank you for the informative article! By far the best I have found while researching this issue.

By: DR

DR — Fri, 28 Jan 2011 14:54:41 +0000

Mike, my best guess is no, because it would be treated as just part of the rent payment. The fact that it is designated as going to property tax doesn’t change that fact. But that is just a guess, and I’d suggest consulting a tax professional before filing your taxes.

By: Mike

Mike — Fri, 28 Jan 2011 14:02:51 +0000

I currently have leased a home with the option to buy. In my lease it says I pay the property tax, which I have done. Even though I don’t own the home yet can I write the property tax off my taxes?

By: COLA

COLA — Wed, 19 Jan 2011 02:23:08 +0000

DR., PLEASE HELP:…………….I would like to enter into a lease/option on a home i recently saw for rent, unfortunatley the rent payment is high and the home is up for sale at a alarmingly high rate, BUT i LOVE the home and would like to buy. The price tag is $339,000 (NEW CONSTRUCTION) and rent is listed @ $1800.00 monthly!!! it’s been for rent for a very long time. How can I get them to come down on the monthly rent to maybe $1500.00 given I put a higher down payment +Security deposit and enter into a lease/purchase contract that included a substantial down payment when time to purchase the home?