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The Perils and Pitfalls of Rent-to-Own Deals

I've gotten several questions over the years about rent-to-own deals. It's important to understand conceptually what's going on in a lease-to-own situation.

Normally what happens is a buyer can't buy a property outright. Either they don't qualify, or they have other uses for their cash, or there is some other limitation preventing them from the buying the property in the first place. That's when they think, "Aha! I'll just rent-to-own. That way some of my rent will go towards a purchase."

And sometimes sellers think that's a great idea, too. Except almost always both of those sentiments are incorrect.

To peel this apart, let's start by seeing what's going on conceptually. The buyers are doing at least two and maybe three relevant things:

  • Renting a house.
  • Buying...

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The Real Deal About Oahu Vacation Rentals

One of the most frequent questions I get from prospective homebuyers on Oahu is, “Can I do short-term rentals in this property?” The short answer in almost every case is “No.”

Short-term rentals — meaning renting out your place for less than 30 days — are only allowed in three areas on island: Waikiki, Ko Olina, and Turtle Bay. That’s it.1,2 It doesn’t matter if we call them “vacation rentals,” “short-term occupancies,” “transient vacation unit use,” or...

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