Finding tenants for a rental property can be a challenge for the investor but finding the right tenants  for a rent-to-own property can downright be a headache if you are not sure what you need to know to qualify the right person. Consider the followings:

You need to consider who makes a better tenant for your type of investment. Odly enough people with damaged or no credit, newcomers to Canada who can’t qualify for traditional financing,  self-employed especially newly self-employed  folks, or people with a good employment history. This may seem risky but for this type of investment they are your bread and butter.

You need to make sure that if the deal falls apart it will not break you and that the property is one that you could hang on to  for a while if you need to. Remember Murphy’s law…anything can happen and it usually does.  Keeping in mind resale value will help in choosing properties that will attract potential renters. Having access to shopping and transportation would also be ideal. Having a home where renters are stuck in the boonies could spell trouble and limits your field on who will want to rent with the idea of purchasing.

The purchase option price should be agreed upon at the beginning of the term. As a Realtor I know the market and can recommend you on this. Price it too low and you will be losing money and if you go too high you will lose the opportunity to rent and might have to sit on an empty house for a while. Bottom line is to price it right the first time around.

You will also want to check the references including financial, personal and professional. Be cautious of discriminating landlords and unbiased testimonials. Following a history line of rentals should make sense. The tenants really qualify themselves as they have a vested interest in the home that could one day be theirs.

Keep the lines of communication open and professional. Set up quarterly  inspection time of the property for upkeep, or have agreed to improvements that the tenants need to make in writing in their contract. Follow up on their continued work at rebuilding their credit.  Stay on top of things.

 
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