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I am wondering whether there is a way to get rid of the risk associated with renting a property one owns by selling the right to rent that property for a certain period?

I am especially interested in the U.S. context.

There are many ways in the U.S. to get rid of risk, management, and transaction costs on a number of goods (e.g., I can go to Carmax and accept to be paid less for my car for the comfort of not having to deal with the hassle and risk of selling the car myself).

What about rental properties? Would any company pay a price (obviously lower than the expected rent) to secure the right to rent my property for a certain period and under certain terms?

For example, I could have a house that's expected to bring in 15k in rental revenue annually, with a certain variance, and I might be willing to sell the right to rent that property for 10k "cash", thereby transferring the risk to whoever would buy this "right to rent".

I can see many reasons why selling such a contract on your property might not be a good idea. Here I am not interested in knowing whether or not it is a good idea. Rather, I would like to know whether any U.S. company specializes in renting houses they do not own through this kind of contract?

Note: I know about property managers which are obviously not what I am looking for here (this obivously does not get rid of the rental risk). See my comment below.

  • How would that remove any risks? there is still the possibility the 'buyer' never pays, and there's still the possibility that the house gets wrecked. – Aganju Nov 5 at 3:13
  • @Aganju Depending on the contract, the wreckage risk might be born by the company (if they have enough properties, they can afford to self-insure). Similarly, if you sell the right to rent your house to a large company with audited accounts, they are much less likely to collapse than a tenant. (If the company fails to hand over the payment, it probably isn't too difficult to take the property back.) – Martin Bonner supports Monica Nov 5 at 11:25
  • Yes, that's part of the idea, the company would pay you now a certain amount (e.g., 10k in my example) for the right to rent your property over the next year (which, in my example, is expected to bring an expected rental revenue of 15k). Then they (the company) get to keep whatever money they make during that year out of renting your house. And they (the company) have the responsibility to return the house in its "original" condition (minus normal wears and tears to be defined in the contract). – Beginner Nov 5 at 12:54
  • This is what WeWork does, more or less? – user662852 Nov 6 at 5:15
  • I assume if you offload each of the pieces of risk one by one until there is none left you will either wind up earning the risk free rate or having a (temporary) arbitrage opportunity. – Michael Nov 6 at 15:02
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WeWork has a residential brand, WeLive, that does not own it's buildings. I guess we'll find out if this is a business model that can grow into single family homes.

The New York-based startup does not own any of its WeWork or WeLive properties, but rather leases floors and buildings from landlords, improves the spaces, and then rents them back out.

Source from 2016

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