16 sats \ 3 replies \ @k00b 15 Aug 2022 \ on: How Bitcoiners Might Break into Housing bitcoin
How does rent to own work for the seller? Like, what's upside?
I understand lease to own in car dealership context (they are trying to move as many cars as possible), but for a home seller it seems like I'm missing something.
You know, I actually didn't know off the top of my head. A quick search gave me this:
https://smartasset.com/mortgage/why-sellers-should-offer-rent-to-own-contracts
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In strong markets with increasing home prices, sellers may unfortunately lock down sale prices potentially before homes reach peak values.
This is my main "concern." Cars are depreciating assets. Homes, at least currently, are not. It seems like you get all the upside of renting, but depending on the housing market you win or lose. I suspect this is why folks rent and/or sell.
In a world where credit doesn't flow so freely I could see this kind of thing become more popular though.
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Yes, so then it may come down to whether you want to speculate on real estate or not. Will the increase in housing prices more than pay for the closing costs you'll have to pay for a realtor? Are housing prices at peak or not? This is speculation and if you don't speculate very well, you may still consider this option.
That being said, if the renter abandons this agreement, the seller keeps their house, weathers the market downturn, and puts the house back on the market (keeping the money they earned from renter without giving them the property). Whereas look at what happens with bank loans. If you have a downturn in housing, the entire financial system comes to a grinding halt, not just home sellers.
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