In this Q&A, Chris Prefontaine answers a landlord’s questions about rent‑to‑own (lease‑option) investing. He explains that he generally does not renovate properties beyond making them habitable; any needed repairs—especially safety‑related issues like leaky basements or electrical hazards—are addressed by negotiating a price concession with the seller and using contractors who are comfortable working on rent‑to‑own deals. For rent setting, he advises starting near market comparables (Rentometer, Zillow) but letting local demand dictate premiums. When the market is hot and multiple buyers are interested, he leverages that competition to push rents higher; when demand is low, he becomes more aggressive to attract tenants. The overall approach balances minimal upfront fix‑up, strategic concessions, and dynamic pricing based on market conditions.
Chapters
Kind of 2 questions that are related to each other. On my lease options where I've placed people into my properties that I own, it seems like I get more rent than say Rentometer or Zillow comps would indicate. I'm not sure if it's because of the, you know, lease option, you know, rent-to-own sort of opportunity, or maybe because I might be fixing my houses up a little more than most landlords do. What's your experience both with the level of fix-up and whether you get any kind of a rent premium by offering the rent-to-own opportunity?
It's tough for me to comment on fix-up because we don't fix them up. Okay. I'm not saying it's bad. Rich Whitman in our group, he came high 6 after coming here. He, he's a rehabber. So he goes, Chris, I got to do it. I got to put in a kitchen. It's just his world. We don't.
I'd rather not.
Yeah, I'd rather you not too know them because you want to get my day. You need— if there's rehab that needs to be done and you think it's like bathroom needs to be done or whatever, you can build that into your agreement with them and price it accordingly. So you get the contractors coming in or the builders coming in that aren't financeable. They love these rent-to-own programs because they don't show their income.
Do you even paint at all or anything? Maybe take out a speedo carpet.
I mean, just except like he had to pull out some stuff. I mean, I'm pointing, I had to pull some stuff out, but I can't remember a time when we did.
Right.
Except maybe if we had a bad turnover once or twice over the years. But no. Okay. As long as it's habitable. Okay. I would pass a few examples of that, like your next few, by me, other coaches, just so we can look at it with you. But by and large, I try not to.
So for example, I'm closing one on Friday that has a leaky basement. Would you do anything about that?
Leaky basement and electrical things, I might. So how bad would you say leaky?
Not bad enough to be an electrical hazard, but there is a wall where water comes in sometimes when it rains, like every time under the door, and then when it rains hard, other places along that wall.
Okay. If you can get a price concession, meaning what it's going to cost times 2, 3, 4. We did a house, the house that I told you, got my group down the hall. I told you we did a house with that 90-year-old lady. Water was pouring in. So I've done like 8 houses. So like this, there's companies all over every state, franchises that'll fix that and guarantee it.
Right.
So yes, I personally, I might spring for that or anything electrical that could cause me to stay awake at night about a fire.
For sure. Yeah.
2 different issues or sometimes related.
Okay. But those 2 would be the 2 you would do. Other than that, you'd pretty much not do anything.
Yes, but I'd make sure I got a big concession to do it.
Yeah.
Yeah. Because the conventional buyer is not going to want to do that. It's great for you.
Right, right.
Okay.
And then with your houses not really being fixed up, do you get any kind of premium over the going rents in the area because it's a rent-to-own, or do you just Figure pretty much whatever Rentometer says, or what do you—
I'm going to tell you all over the board. Nick's always going to start closer to, in your example, like a Rentometer, but the market's going to tell us. Not sure where to get started? Go to smartrealestatecoach.com/getgoing for free books, strategy calls, and a whole bunch more. We're going to help you get going the wicked smart way. We've been after this for over a decade doing exactly that. So if the market's steaming hot, we have 5 buyers. Like, I've literally been in attorneys using his conference room. and have 3 buyers sitting out there, all of a sudden their deposits go right up because they know someone else is coming in the room. You do that on purpose. If, on the other hand, I'm hearing crickets and there's nothing, then I'm going, oh man, then we get more aggressive. It's across the board.
So when buying, go with kind of prevailing rents, but then hope that on a case-by-case basis you can do better.
Yeah, negotiate that way. But yeah, try to do better.
