It might seem like a long shot, but buying the home you currently rent is a totally doable real estate endeavor. All it takes is a little time, research, and know-how to have a productive conversation with your landlord about the prospect of eventually buying your place.
To help us figure out how to make this unconventional home buying situation actually happen, we called on real estate agent extraordinaire Amy Herman—of the Serhant Team at Nest Seekers International—for her expertise. Read ahead for a no-nonsense guide to buying the home you rent from your landlord.
1. Know your landlord
Herman says the first step in buying the home you rent is to figure out as much as possible about your landlord, particularly if they own multiple properties or ever intend on moving back to the property you are renting from them. “If they are purely in it for fiscal reasons then understand that this is helping their cash flow,” Herman explains. “If they own it for emotional and sociological reasons (because they love the neighborhood and intend to move back) then the purchase will be extremely difficult unless you offer them a number they just can’t refuse.”
2. Know the market in your building
If the home isn’t a standalone house, begin to research comparable sales in your building to get an idea of your home’s market value. If there aren’t any recent sales in the building, Herman suggests scouring industry websites (like OLR and StreetEasy) to see what properties of similar size, location, and condition are going for. “Look at all past sales in the last 12 months the way an appraiser would do to evaluate and determine the market price for the property.”
3. Do more research
“Go into the actual sales market and look at comparable properties that are actively listed in your neighborhood.” Herman suggests researching at least 5 to 10 of properties, paying attention to days on the market, the current condition, and how they compare to the subject property. “This way, you can have a discerning conversation with your landlord about the marketplace and have the stats to back up your suggested bid.”
4. Reach out to your landlord in their preferred method of communication
Herman recommends being as accommodating to your landlord’s communication style as possible to improve your chances of buying. “If your landlord prefers email, email them asking if there is a good time to chat. And if they prefer to text, text and ask for same.” She explains, “Let them know nothing is wrong—they may worry that something is not working or you are asking for a rent rebate—and that you have an idea you would love to discuss with them.”
5. Have a no-pressure conversation
“Timing is everything,” Herman says. “Make sure you give your landlord enough time to discuss the idea with you; not 30-60 days before your lease is due. And always enter conversations with a landlord as you would a new client at business meeting: with respect, a well-thought out plan, and the research to back up your statements.”