Selling your Milwaukee property through a rent-to-own agreement can be a smart strategy when you want to achieve your asking price while attracting motivated buyers. It’s not just about moving the property quickly — it’s about creating a structured path to ownership that works for both you and the buyer. Done right, this method can give you steady rental income, protect your property’s value, and open the door to buyers who may not qualify for a traditional mortgage today but are on track to do so within a few years. In this guide, we’ll walk through the key steps to set up a rent-to-own deal that’s legally sound, financially worthwhile, and tailored to the Milwaukee market.
Step #1 – Find The Right Tenants
When entering into a rent-to-own agreement, it’s important to choose a tenant-buyer who is both financially capable and serious about eventually purchasing your Milwaukee home. While personal trust is helpful, always rely on objective screening criteria that comply with Wisconsin’s Fair Housing laws. This means verifying employment, reviewing credit history, checking rental references, and confirming that their income is sufficient to cover rent and the future purchase price.
In the Milwaukee market, many sellers also request a non-refundable option fee and the first month’s rent upfront — this shows commitment and provides financial security if the buyer changes their mind. I’ve seen deals fall apart because the seller skipped proper vetting, only to face missed payments and costly repairs later. Document every term in writing, avoid verbal agreements, and make sure both parties understand their obligations before signing anything.
Step #2 – Run The Numbers
As a seller, entering into a rent-to-own agreement means you’re trading immediate full payment for a potentially larger payout later — so it’s critical to calculate the true cost and return before committing. In Milwaukee, start by comparing recent home sales in your neighborhood to estimate a realistic future sale price. Factor in projected appreciation over the lease term and any maintenance or property tax expenses you’ll still be responsible for during that time.
Your monthly rent should at least cover your mortgage (if any), property taxes, insurance, and a buffer for repairs, while remaining competitive with other rentals in your area. In many cases, rent can be slightly higher if a portion is credited toward the purchase price — just make sure those rent credits are clearly defined in the contract to avoid misunderstandings. And don’t forget the tax side: rent credits and option fees can be treated differently for IRS purposes, so it’s smart to run your numbers past a tax professional before finalizing the agreement.
With a rent to own agreement, the sale price is typically locked in at the time of purchase. However, in some cases, a tenant will agree to purchase at the market value at the time of the actual sale. While you run the risk of your home value dropping, you might also be able to get a higher price when all is said and done. If your tenant agrees to this, it is something you will want to consider!
Step #3 – Agree On Terms
There are many things a buyer and seller must agree to before executing their rent to own agreement. Before the buyer and seller sign on the dotted line, make sure to have an attorney look things over. Even the smallest mistake in your contract could have a huge impact on your ability to sell on the terms you had planned on.
A few of the financial details you will want to cover include:
- Will there be a down payment?
- How much will the rent be each month?
- How much if anything, will go toward the buyers down payment?
- How long before a purchase is required?
- Who will be responsible for taxes, maintenance?
- What happens with a default?
Spelling everything out as clearly as possible from the get-go will save you from any disagreement and frustration during the lease process and when it’s time to officially sell. When handled correctly, a rent to own agreement is a great way for a homeowner to sell their house in Milwaukee.