RTO Information for Property Owners Back
The Advantages of RTO to Owners
· Offers cash flow on properties that might otherwise just be sitting waiting to be sold or rented.
· Property is not left vacant
· Buyers/Tenants would be responsible for all repairs, maintenance, and upkeep of the house and land
· RTO process managed by a real estate agent
· Property is managed by an experienced and reputable property management company
This program has been created to assist buyers that have minor challenges, which are holding them back from purchasing a home. These buyers must be able to remedy all challenges within 2 years (or less to purchase the property). When the buyer is ready to submit an offer to rent/purchase, they will have been approved for the RTO program, ready to pay deposit, ready to pay first month’s rent, already connected with a lender for guidance towards mortgage approval, and is ready to move in. While completed the rental process, the buyers will be responsible for staying in contact with their mortgage advisor/ credit counselor on a regular basis to receive financial guidance when needed.
The Advantages of Rent-To-Own to Buyers
* They get to moving into a home that they will one-day own while clearing their challenges
* A portion of the monthly rent paid is applied towards the purchase price of the house or closing cost money needed
* The tenant would also be saving owards money needed for closing costs
During the rent to own term, Buyers will be Tenants and Owners will be Landlords.
Property/ Account Management
To make this program as convenient and successful as possible for everyone, Premier Property Management Group (PPMG) and Amber Cruz will be managing the property, account, and tenant to insure successful completion of the program. PPMG will handle landlord responsibilities; mail Owner(s) monthly statements and payments and handle all Tenant questions and issues. For PPMG to handle the property and account management, there is a monthly fee involved for property management services (average 8% of rent collected) but the Buyer(s)/ Tenant(s) will be paying a portion (about 4%) of this monthly fee.
Property Maintenance and Repairs
Tenant(s)/ Buyer(s) will be responsible for all property maintenance and repairs, including lawn care and snow removal. Housekeeping inspections will be completed by the property management company to make sure the tenants are keeping the property as Buyer/tenants agreed in the lease. Buyers/ Tenants are required to purchase a home warranty program which will cover repairs/ replacements of some major appliances/systems unless, owner agrees that Buyers/ Tenants don't have to purchase.
Monthly Tenant/ Rents Payments
Tenant(s) will be required to make monthly RTO payments. When making RTO payments, the Tenants will be paying rent, saving money towards their closing costs, and assisting with the account/ property management fee.
Deposit Money
Buyer(s)/ Tenant(s) will be required to put a deposit down (min $1000 – dep amt increases based off of property value ). This deposit money will be used like security deposit during the rental period (which will be held in Premier Property Management Group’s escrow account) and then will be transferred to closing cost money at settlement. If the Tenant(s) are not able to successfully complete the RTO program and purchase the property, the deposit money will be used to correct any property infractions, resolve any account balance and then the owners have the option of keeping the remaining deposit money (depending on the reason for break in contract) for lost of marketing time during the RTO process and allowing the Buyer/ Tenant the opportunity to complete the RTO program with your property.
Insurance
Tenants- will be required to hold an active renter’s insurance policy while completing the RTO program. Tenant will also be required to hold and active home warranty policy on the property to assist with major repairs/ replacements (which, is stated above also).
Owners- will be responsible for holding an active Home Owner’s insurance policy. Owners will need to contact their insurance company to advise the property is being rented out instead of being owner occupied.
Property Inspection
If the city or municipality requires an inspection to be completed for the rental or sale of the property, the owners of the property would be responsible for the cost and a copy of the report needs to be provided to the buyers/before entering into agreement. Estimated cost of inspection is $75 to $350. The Buyer (s) may also want to have additional inspections completed at the property at their own expense before move in.
Agent(s) Payment
Agent(s) will be compensated 2 ways: 1) The first months rent payment will be paid to the Real Estate agent(s) involved. 2) Once the RTO program is successfully completed, the agents will still get their normal compensation for sell the property.
To make this program as convenient and successful as possible for everyone, Premier Property Management Group (PPMG) and Amber Cruz will be managing the property, account, and tenant to insure successful completion of the program. PPMG will handle landlord responsibilities; mail Owner(s) monthly statements and payments and handle all Tenant questions and issues. For PPMG to handle the property and account management, there is a monthly fee involved for property management services (average 8% of rent collected) but the Buyer(s)/ Tenant(s) will be paying a portion (about 4%) of this monthly fee.
Property Maintenance and Repairs
Tenant(s)/ Buyer(s) will be responsible for all property maintenance and repairs, including lawn care and snow removal. Housekeeping inspections will be completed by the property management company to make sure the tenants are keeping the property as Buyer/tenants agreed in the lease. Buyers/ Tenants are required to purchase a home warranty program which will cover repairs/ replacements of some major appliances/systems unless, owner agrees that Buyers/ Tenants don't have to purchase.
Monthly Tenant/ Rents Payments
Tenant(s) will be required to make monthly RTO payments. When making RTO payments, the Tenants will be paying rent, saving money towards their closing costs, and assisting with the account/ property management fee.
Deposit Money
Buyer(s)/ Tenant(s) will be required to put a deposit down (min $1000 – dep amt increases based off of property value ). This deposit money will be used like security deposit during the rental period (which will be held in Premier Property Management Group’s escrow account) and then will be transferred to closing cost money at settlement. If the Tenant(s) are not able to successfully complete the RTO program and purchase the property, the deposit money will be used to correct any property infractions, resolve any account balance and then the owners have the option of keeping the remaining deposit money (depending on the reason for break in contract) for lost of marketing time during the RTO process and allowing the Buyer/ Tenant the opportunity to complete the RTO program with your property.
Insurance
Tenants- will be required to hold an active renter’s insurance policy while completing the RTO program. Tenant will also be required to hold and active home warranty policy on the property to assist with major repairs/ replacements (which, is stated above also).
Owners- will be responsible for holding an active Home Owner’s insurance policy. Owners will need to contact their insurance company to advise the property is being rented out instead of being owner occupied.
Property Inspection
If the city or municipality requires an inspection to be completed for the rental or sale of the property, the owners of the property would be responsible for the cost and a copy of the report needs to be provided to the buyers/before entering into agreement. Estimated cost of inspection is $75 to $350. The Buyer (s) may also want to have additional inspections completed at the property at their own expense before move in.
Agent(s) Payment
Agent(s) will be compensated 2 ways: 1) The first months rent payment will be paid to the Real Estate agent(s) involved. 2) Once the RTO program is successfully completed, the agents will still get their normal compensation for sell the property.
Some Things to Consider if You are Interested in Selling through the RTO Program:
- What’s the lowest monthly rent amount you’re willing to accept (I can assist you with this figure if you are not sure)?
- Do you agree with giving 25% of the monthly rent (if paid on time) from the purchase price of the house or give towards closing costs if the Buyer(s)/ Tenant(s) complete the RTO program successfully? This amount will not be deducted from the monthly rent payment but, will be deducted from the purchase price when the buyers are ready to purchase or applied as closing cost assistance when the buyer is ready to purchase.
- PPMG be managing your property during the RTO process for about 4% of the rent collected. (Consider: routine inspections, collection of rent payment, lease violations, etc..)
| House Value | $450 K | $400 K | $350 K | $300 K | $250 K | $200 K | $150 K | $100 K | $85 K | $70 K | $55 K | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Monthly Rent | $3,225 | $3,150 | $2,900 | $2,700 | $2,300 | $1,895 | $1,407 | $1,000 | $883 | $750 | $615 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Click Here for RTO Questions & Answers
If this information did not answer all of your questions or you would like to list your property For Sale/ Rent to Own, please contact me.
Thanks and I look forward to working with you!
Thanks and I look forward to working with you!