First thing I learned on mommy’s knee, Real Estate 101: avoid residential tenants like the plague they are.
What does it take to convince people that renting residential is Russian Roulette? Sooner or later your luck runs out, usually on the month you need that rent money the most.
The law is not on your side, and deadbeat tenants know it. Trusting to luck, law and tenants is reckless and stupid.
If it’s a small (single or 2-fam) place, SELL it to them before they ruin you. Then you get all the deposit you can squeeze out of them, and they forfeit it if they don’t make the payments. All the repairs are on them. They don’t get title until they’ve paid in full. That way, every month that goes by, they have more money sunk in the place and less incentive to shaft you. It’s anti Russian Roulette, your luck improves each month.
Been doing that for 10 years and never had a problem with anyone.
Are you referring to “rent to own” and/or “land contracts?”
In my area the true Dechets Blancs seek out rent to own. They never end up buying the place and you end up with a destroyed building.
We bought one such person out of their contract. Basically a 4 bdrm SFH for 11K. Normally would sell (pre 2021 market) for 80K. Fleas and all.
P.S. I have a 50 question pre qual including screenshot of their credit score. Again 98% fail my automated prequal and get an email automatically sent to them saying thanks but no thanks.
IF they pass the prequal, they get a tour requiring ALL residents to be present including minor children where their behavior and conversation is observed CLOSELY. Then they are given an application.
IF they pass previous LL reference (not current LL who may be looking to get rid of them and will give them a great review), 3-6 months of bank statements, credit score verification, 6 months paid rent verification, utility bills, income verification directly from the employer, income to expenses calculation and my 2 minute in home visit to see how they are taking care of the current property, then they get a green light. In all this they MUST be cooperative. ONE sigh or slightly negative comment about the process is an automatic disqualification.
In my market, rent to own tenants don’t take care of your property period because they are too lacking in funds to do the upkeep and have warped priorities just like the standard subsidized tenant, otherwise they would have gotten a conventional mortgage/FHA/VA mortgage. They do cob repairs and make everything worse. IMHO. All my properties are paid for except for one very small HELOC that I use now and again but pay off quickly. I’d rather have an empty hole (vacancy) than an A h0L3 (bad tenant).