Have you ever leased a car? If you have, then you already know what a lease option is. When you lease a car, you do so with the option to buy it at the end of the lease period. If you don't wish to buy it, you can give it back and buy or lease another car. Substitute house for car and you’ve got the idea!
A lease option is exactly what it says it is. It means leasing the house with the option to buy the house within a certain time frame at a predetermined price. This process may also be referred to as lease purchase or rent-to-own. Many people think that this procedure entails taking a security deposit plus the first month’s rent, putting the tenant in the property and waiting for the tenant to call at some point and say: I’d like to buy the house now. That is a lease with the hope that the tenant will buy! How we lease option a home is not even in the same universe. All the conditions of both the sale and lease will be spelled out in advance and a specific time line will be adhered to.
Why Do Lease Options work?
Lease options work because there is a huge market for them.
This market is made up of buyers who have some sort of problem that will not allow them to qualify for a mortgage. The problem could be bad credit or lack of the full down payment. A lease option affords these people the opportunity to purchase a home that they otherwise could not acquire.
On the other side of the coin, a lease option helps a homeowner to sell a home that for whatever reason (job transfer, divorce, retirement, location of house, etc.) could not get sold quickly enough or in a conventional manner.
The lease option process is not very complicated. Lease options work because both parties need each other. I find these people and put them together.
What Are the Lease Option Benefits to Tenant/Buyers?
Price locked in up front.
Low down payment.
No loan qualification needed.
Time to obtain good financing.
No taxes to pay.
Time to repair credit.
Time to save additional down payment.
Time to check out the house and neighborhood.
And some others.
What Are the Lease Option Benefits to Landlord/Sellers?
Huge market of buyers all the time.
No management headaches.
No realtor commissions.
Higher quality of tenant.
Seller [may] retain tax shelter [check with accountant for specifics].
Wholesalers: Don't trash leads. This video explains what we offer:
What is a Lease Option?
Watch this video, and you can also read below, for more info: