Do you own a property in the Milwaukee area and want to sell it without leaving money on the table? For some homeowners, a well-structured rent-to-own agreement can provide a win-win solution: steady income now, a strong sales price later, and access to a larger pool of buyers who may not qualify for a mortgage today.
Many sellers don’t consider the benefits of a rent to own agreement for their Milwaukee house. While the terms of every contract are different, there are some great perks that you will see across the board. If you don’t need the cash from the sale immediately and are comfortable renting out the house for an above average amount each month, selling your house via a rent to own agreement might be the best way to sell your Milwaukee house!
#1 – Cash Upfront
With most rent-to-own agreements, the tenant-buyer provides what’s called an option fee—a payment that secures their right to purchase the property later. This fee is typically 1–5% (sometimes more) of the agreed purchase price, depending on market conditions and negotiation. Unlike a traditional down payment, the option fee is usually non-refundable, which helps ensure the buyer has real “skin in the game.” To keep things transparent and enforceable, the agreement should spell out exactly how much of the fee is credited toward the eventual purchase price, how rent credits will accumulate, and under what conditions the buyer may forfeit those credits. For additional protection, many sellers place these funds in escrow or document them clearly at closing. Setting this up correctly not only gives you upfront cash but also helps filter out tenants who aren’t truly committed.
#2 – Generate Passive Income
So long as you have a tenant in the home, you will be generating income on the property. Many times, a tenant will pay above average rent, with a portion of the funds going toward the eventual downpayment to the bank. Your tenant isn’t going to want to risk default, losing their deposit and option to buy. Knowing this you can almost rely on a continued tenancy from your tenant for as long as you own the property.
#3 – Get The Price You Want
Tenants using a rent to own agreement typically aren’t able to qualify for a conventional loan. Whether they don’t have the down payment, the income to qualify, or the credit score required, buying via a rent to own agreement will allow people to purchase who may not have been able to in the past. As such, by having the opportunity to buy, these folks will likely be willing to pay your asking price for the property, as long as it’s fair.
Keep in mind that the value of the house could go up or down while the agreement is in place. The negotiated sale price will remain the same.
#4 – No Risk If The Tenant Defaults
If a tenant-buyer defaults on the agreement, you typically have the right to retain the option fee and any rent credits already paid, but it’s important to recognize that a default isn’t without costs. You may face lost time, potential legal steps to regain possession, and property cleanup or repairs before marketing the home again. A well-written contract should include default and cure provisions—for example, giving the tenant a defined period to fix missed payments—and clarify exactly how credits are treated if they fail to complete the purchase. It’s also wise to consult a Wisconsin real estate attorney to ensure your default clauses comply with state law. While a default can feel like a setback, having safeguards in place means you’re likely to recover financially and still be in a strong position to resell or re-list the property under another rent-to-own arrangement.
#5 – Increase The Number of Potential Buyers
There are kinds of wonderful people out there who could afford to buy your house, people who would never default on their loan. However, they may have a blemish on their credit report or insufficient down payment, making them unable to buy a house at the moment. They want to buy but are being held back due to something on paper. With a rent to own agreement, you will be able to open the door for many people who may not have been able to buy otherwise.