Real Estate Exit Strategies

There are differences between renting and doing lease to own. When doing a lease to own or something similar, make sure you include clauses in place that allow your lease to own buyer to make most repairs and take care of expenses that traditionally a landlord would have to pay. Remember that lease to own is not renting from the start.

Note Buying

Lease to own and owner financing can substitute subprime lending. Using the same idea, some real estate investors turn into note buyers. Investors who buy owner financed notes at a discount and hold them for the long term payout will find much more lucrative opportunities.

Renting

When the real estate market is hot, few people wanted to rent because they could get tax breaks and pay less in mortgage payments than rent payments AND own the property. Nowadays with the high mortgage rates, strict lending regulations, more people are renting. Since foreclosure rates have hit record high, people are scared of owning a home and have opted for renting instead. Renting can be a great real estate exit strategy.

Luxury and second home market

Buyers of luxury and second homes are often rich people with high disposable income who are not affected by the real estate market fluctuations. Although sales of this type of homes may be lower due to slower economy, they are generally not affected by the rest of the real estate market movements.

If you local real estate market is slow, you may want to consider the luxury and second home market which includes resorts and condos at vacation destinations.