ArkTinkerer
Full time employment: Posting here.
- Joined
- Aug 12, 2014
- Messages
- 584
Considering sale of rental property to tenants. Goal, for me, is to spread the purchase cost over time with the least risk.
I am considering setting it up as a lease with option to buy, perhaps with some funds going toward the purchase price. If I could spread the purchase over 5 years I think I would be in much better shape tax wise. I don't want to be in a position to have to do a foreclosure rather than simple eviction. If I did the lease with option, I would want a COLA adjustment to the payments, and, to be fair, would increase the amount dedicated to the purchase to have the same adjustment. Adjusting the purchase price the same way sounds good but I don't know if that will fly. Also either have to have a fund for insurance and taxes or proof those are paid. Then there is the issue of making sure the property is maintained. Lots of items that need to be covered in ways I have not done before.
Could really use some practical advice from those who have done this before.
I am considering setting it up as a lease with option to buy, perhaps with some funds going toward the purchase price. If I could spread the purchase over 5 years I think I would be in much better shape tax wise. I don't want to be in a position to have to do a foreclosure rather than simple eviction. If I did the lease with option, I would want a COLA adjustment to the payments, and, to be fair, would increase the amount dedicated to the purchase to have the same adjustment. Adjusting the purchase price the same way sounds good but I don't know if that will fly. Also either have to have a fund for insurance and taxes or proof those are paid. Then there is the issue of making sure the property is maintained. Lots of items that need to be covered in ways I have not done before.
Could really use some practical advice from those who have done this before.