- How Much Money Is Needed To Invest In Rental Property?
- Should A Real Estate Investor Get An Agent’s License?
- 5 Big Factors That Affect The Costs Of Renovating Your Home
- SIBOR Hike – What You Can Do With Your Current Loan
- 6 Basic Don’ts Of Real Estate Negotiation Tactics
- Will New Condo Relaunches Trigger The Great Property Sale We Have All Been Waiting For?
- 10 Proximity Amenities That Add Value To Real Estate
- How To Get Personal Loans More Easily With Good Credit
Redeemable rent refers to leases with purchase options whereby the rental paid by the tenant over a period of tenancy can be used to offset the purchase price of the property should the option be exercised.
Thus, granting such attractive terms to tenants.
Because if for example, a rental is $1,000 a month and the purchase option is $150,000 in 12 months, the seller would effectively be forgoing $12,000 in rental revenue just to let go of the property.
It might be hard to sell the particular house. Which is why the seller wants a tenant to grow emotionally attached to it, and eventually buy it.
The redeemable rent can be an amount equal to the total rental paid, a percentage of that, or a per-determined amount agreed by both parties.
Tenants are advised to look at all factors of buying a house instead of putting the sole focus on price or a “discount” on price.