WHY A LEASE OPTION?
Would you like to buy a home but you don't have enough cash for a down payment?
If you answered "yes" to this question, a lease with option to purchase can solve your problem. But it's important to understand the pros and cons of lease-options to maximize your benefits.
What is a Lease-Option?
A lease-option is a combination real estate rental, sales and finance technique. It is a property lease for a fixed time period, such as 12 or 24 months, with an option for the tenant to buy the property at an agreed option price during the lease term.
Buyers like lease-options because little up-front cash is required. Sellers also like lease-options because they provide necessary cash flow to pay the mortgage and property taxes from a tenant who has a vested interest in treating the property well and who is likely to buy it.
What is a Lease-Purchase?
A lease-purchase is different from a lease-option because it obligates the tenant to purchase the property at the end of the lease. With a lease-option the tenant has the right, but not the obligation, to purchase the property.
Advantages For Buyers
Lease-option benefits are not one-sided. Advantages for buyers include:
- Small Amount of Up-Front Cash Required
The amount of up-front cash required to acquire a home or other property on a lease-option is usually small, often just a few thousand dollars for the first month's rent plus non-refundable option consideration. This option money is in lieu of a security deposit. - Try Out the Property Before Buying
Another special lease-option benefit for the tenant is the ability to try out the property before buying. If it is undesirable, the tenant hasn't tied up a large amount of cash in a home that might be difficult to resell. - Control Property With Very Little Cash
The ability to control a property and profit from its market value appreciation with very little cash is called leverage. Lease-option buyers have this unique advantage. - Longer Terms Mean Greater Profitability
Although most residence lease-options are for short terms, such as one or two years, smart investors seek lease-options with the longest possible term. They reason the property is likely to appreciate in market value over the long term.
Call Sire Properties Today For More Information At (941) 927-0040