Options are in high demand. No matter how slow the local real estate market is, there is always a buyer shopping for options. Many prospective home buyers can usually afford the monthly payments but they have often have insufficient cash for a down payment. A lease option agreement solves this problem by giving the buyer a rent credit toward the down payment. It's like a savings account. In addition, the buyer usually deposits a nonrefundable consideration for the option, typically several thousand dollars.

Because of strong buyer demand for lease-options, when done correctly, home sellers can demand and get top dollar for their properties. Option prices are set by market value & economic indicators help compute an estimate of future value. When signing a lease option agreement for real estate, If the market value goes up during the lease-option term, the buyer benefits. Should the property drop in value, then the tenant usually doesn't complete the purchase.

Someone who is looking to buy an option will make a quality tenant. During the course of a lease option, the tenant usually takes good care of the property as if they own it.

The option market is a horizontal in that it is more lucrative than the standard rental market. Sellers are earning rental income that is above the market value. If a local landlord charges a tenant 100% of fair market value, a local optioneer will charge 110% to 120% of the rental value to meet fair option value.

During the lease-option period, the seller retains all the property income tax deductions. If a tenant complains about not receiving any tax benefits, a reminder about the rent credit toward the down payment usually ends the discussion.