What percentage of the previous rent paid would be appropriate to go towards the purchase price of a property?
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What percentage of the previous rent paid would be appropriate to go towards the purchase price of a property?
I own a rental property. I have recently decided to sell the property. My tenant would like to know if I would be willing to let a portion or percentage of the rent he has paid go towards the purchase price of the property. Is this legal? What percentage of the previous rent paid would be appropriate?
Asked on February 21, 2012 under Real Estate Law, Missouri
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Good question. The amount to be allocated on a possible lease option to purchase a rental varies in each community in each state.
However as a general rule a 10% to 20% allocation of the monthly rental to the unit's purchase price is within the realm of accepted practice in the real estate industry.
If you have an agreement in principle for a lease option to buy with your tenant, I suggest that you consult with a real estate attorney to prepare a written agreement to be signed by you and the tenant with a certain period of time to exercise the option.
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