For rent by owner? Compare renting it yourself with your other options

Should you rent or sell?

Renting can make sense if the rent covers your mortgage, taxes, insurance and repairs with room to spare, and you're ready to be a landlord. Selling may make more sense if the numbers are thin, the home needs work, or you need the equity now.

• What will it rent for, realistically?
• What are all the monthly costs, including repairs and vacancies?
• Do you want to manage tenants, or hire a manager?
• What could you net if you sold today?

Lease option: rent now, sell later

In a lease option, a tenant-buyer leases the home with the right, but not the obligation, to buy it at an agreed price within a set time. The tenant-buyer usually pays an upfront option fee, and sometimes part of each month's rent is credited toward the purchase.

For you, it can mean steady rent, a tenant who treats the home like their own, and a sale price set today. The risk: the tenant-buyer may never buy, and you remain the owner, with the mortgage and taxes, until they do.

Master lease: hand off the day-to-day

In a master lease, an investor leases the whole property from you, usually for several years, and pays you an agreed monthly amount. The investor handles tenants, repairs and vacancies, and often has an option to buy the property later at a set price.

It can turn a draining rental into a predictable payment. Read the agreement closely: who pays for major repairs, what happens if the investor stops paying, and whether subleasing is allowed.

Lease option vs. master lease

A lease option is usually with one tenant-buyer who plans to live in the home. A master lease is usually with an investor who operates the property, and can cover a single home or several units. Both can include a future sale price. Both keep you on title, and both depend on the other party performing, so written agreements and an attorney review are essential.

Subject-to: sell while the loan stays in place

In a subject-to sale, the buyer takes title and makes the payments on your existing mortgage, which stays in your name. It can help when you have little equity or a low interest rate a buyer wants to keep.

The risks are real: your credit stays tied to that loan, and most mortgages have a due-on-sale clause that lets the lender demand full payment after a transfer. Only use subject-to with a written agreement, a way to verify payments are made, and an attorney.

Rent to own vs. a lease option

"Rent to own" is the everyday name for a lease option or a lease-purchase. In a lease option, the tenant can choose whether to buy. In a lease-purchase, the tenant is obligated to buy. Make sure your contract says which one it is.

Why work with a licensed agent who is also an investor

Most sellers have to pick a side: call a cash buyer and hope the offer is fair, or call a realtor and wait for a retail buyer. Travis can do both, and he'll show you the numbers for each before you decide.

• He invests himself. Travis can make a direct cash offer on some homes, as a principal, with his license status disclosed.
• He knows other investors. If a home isn't a fit for him, he can bring it to local buyers he already works with, so you can compare more than one offer.
• He finds investors on the MLS. As a licensed agent, he can list the home where agents and their investor clients look every day, which can bring more competition than a single "we buy houses" call.
• He's licensed in Mississippi. That means written agreements, clear disclosures and a duty to deal honestly with you.