Comments on: Rent-to-Own

By: Mark Loeffler

Mark Loeffler — Thu, 18 Feb 2010 15:59:04 +0000

Great example of Rent-to-Own. The biggest thing in the rent-to-own business is managing expectations. If you can manage your tenants and investors expectations you will find that win-win scenario everybody is looking for.

By: Four Innovations I Have Been Wrong About

Four Innovations I Have Been Wrong About — Fri, 02 Oct 2009 02:22:02 +0000

[...] simply save that rent payment for a few months and purchase it with cash?� Was I ever wrong! The rent to own businesses are [...]

By: Weekly review of personal finance blogs for week of March 9th | Financial Highway

Fri, 13 Mar 2009 05:21:36 +0000

[...] Four Pillars Looks at Rent-to-Own options. [...]

By: A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com

A Lap Of The Blogs : WhereDoesAllMyMoneyGo.com — Fri, 13 Mar 2009 01:10:51 +0000

[...] Pillars explains how you can rent-to-own instead of just renting, and instead of taking the ownership plunge right [...]

By: Mr. Cheap

Mr. Cheap — Thu, 12 Mar 2009 18:05:25 +0000

qmanrei: Thanks for a link to a real, Canadian rent-to-own real estate company.

By: qmanrei

qmanrei — Thu, 12 Mar 2009 16:15:08 +0000

There are lots of different benefits and drawbacks to both parties. I’m not writing the article however.

You are taxed at your regular tax rate and not capital gains when you are doing a Lease to Own. Unless you incorporate.

Here’s our RTO web site http://appleridgehomesRTO.ca

By: Mr. Cheap

Mr. Cheap — Tue, 10 Mar 2009 19:33:04 +0000

Shank: Yes, the taxation does get complicated.

Ray: If you wanted to advertise a rent-to-own property, I’d just advertise it in normal rental channels, and ad as part of the rental description that you’re open to offering a rent-to-own. In terms of finding such units, that’d be more of a challenge (my understanding is they’re fairly rare). It’d be a rare landlord / property seller who would be open to a lease-option if they didn’t offer the option from the start.

By: Ray

Ray — Tue, 10 Mar 2009 18:21:38 +0000

I have been interested in Rent-to-Own option for a while but there really isnt a medium to find such units or advertise it.

Shank: that is actually a good question, i have never thought about it from a tax perspective.

By: Shank

Shank — Tue, 10 Mar 2009 16:30:08 +0000

I also wonder from the landlord perspective how you would handle the tax implications which would only add to your costs as now you probably need an accountant in addition to legal counsel. And if the additional tax issues would be worth it.

For instance, in your example, $1800/year goes to a potential down payment. Normally, all rental income is taxed as that – income. But is this $1800 income? Deferred income? Or does it form part of a capital gain? You won’t know until three years out thus creating complications of how you file for three years, and do you refile if the option is exercised etc.

Essentially, if you are a small (only a few rental properties) rent-to-own landloard the handling of your taxes could just be an unneeded frustration.