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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. |
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Monthly Rent Credit Builds a Down Payment
The unique characteristic of a lease-option is the rent credit toward the buyer's down payment. Typically, the rent credit is 10 to 100 percent of the monthly rent, depending on how motivated the seller is to sell. The higher the rent credit percentage, the greater the probability the tenant will buy. |
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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. |
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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. |
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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. |
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Credit Is Not Required
It's not a loan or a mortgage. It's finance without borrowing any money. As long as you have the funding to pay rent, you don't need a lender. If you're paying principal & interest payments for ownership because you can't secure a loan, pay principal & rent payments for ownership instead. |
Buyer Tenants 