Recently I posted some information about the benefits of doing a rent-to-own versus renting a home. I’ve received some questions about the tax advantages if any that I thought I would try to answer.
Question: Are there any tax advantages to renting versus rent-to-own?
The simple answer is no.
In both cases you’ll be paying or receiving rent. Ownership of the property doesn’t change until the rent-to-own option is exercised sometime in the future as per the terms of the rent-to-own contract.
The owner of the property will continue to write off the interest and property taxes on their tax return and will have rental income to report.
The benefit of doing a rent-to-own is that the ‘seller’ has someone living in the home who hopes to buy it. The ‘buyer’ is responsible for the maintenance of the home.
Also the ‘buyer’ starts to build equity from day one in exchange for making the rent payments on time as a portion of the rent each month will be credited towards the purchase price when the option to buy the home is exercised.
Buyers/Renters – I can help you find a seller who is willing to rent-to-own.
Seller – I can help you find buyers who want to rent-to-own.
Hope this helps.
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