Lease questions????

Hoping Moosie or someone with more experience than me can help me out. We moved into our new home recently and have been getting the other home ready to put on the market. My thoughts were to just see if we can sell it in this market. There is a family from church that called and they would like to lease the home from us. So my questions are:

1-is this a good idea?
2-how do you determine the lease amount and what goes towards the down payment?
3-do they cover the insurance and taxes or do I?
4-do we lock in a sale price today or go with market rate later on?
5-what else should I be looking at?

Thanks for any help.

Are they wanting to simply lease it or do an option to buy/lease -to-own agreement?

If they are simplying leasing it (renting it for a set period of time,) then you pay the taxes and insurance. They would pay for insurance of their personal property like furniture, etc.

If they are doing a lease-to-own, then I would still want to cover the taxes and insurance since it is still my property and I would not want to lose it because they did not pay the property taxes or let the insurance lapse and then the place catches fire.

The other terms are subject to negotiation. Set the price now - you are gambling it might go down and they are gambling it will go up. So decide on a reasonable figure that works for both of you but is locked in now.

I would say that you want the payment to cover a 20% down payment by the end of the term of the agreement or option. Add the monthly amount needed to reach that to what is a reasonable monthly rent. That way, they are much more likely to be able to obtain financing at the end of the term. (Unless you want the property back and this is just a way to get more monthly income without really selling to them later... )

I'm sure Moosie has some advice since he has done this before. You'll want an attorney or realtor with experience in leasing or commercial leases to look over the agreement/contract.

Great questions! I'm hoping Oscar chimes in as I'm currently looking to take advantage of the foreclosure situation here in the east valley. I could easily cash flow my home as a rental to the tune upwards of 50%!

I'll probably hire a property management outfit to rent out my home for the first year. I'd love to see how he or anyone else for that matter does background checks on prospective renters and mls advertising. This could add even more profit in the future!