There are two sides to every coin when it comes to leasing options. Here are some tips on real estate leasing options that balance the coin to landing on your edge, benefiting both buyer and seller.
A lease option is a lease with an option for the tenant to purchase the property, usually within a twelve to twenty-four month time frame. Unskilled buyers and first-time buyers view the lease option as an ideal financial technique, giving them time to get their home financing in order. Take a look at the following tips on real estate leasing options for the buyer.
Benefits and Tips on Real Estate Lease Options for Buyer (Tenant):
- Pay little cash up front (certainly much smaller than a typical down payment)
- The monthly rental credit generates the down payment: a forced savings “account”
- Live in the house you intend to buy
However, this convenience is not without cost. The tenant generally pays an option fee plus rental credits (10% to 100% of the rental rate), in addition to the monthly rent. The seller keeps these monies if the tenant does not exercise the option.
With that said, here are benefits and tips on real estate lease options for the seller (landlord):
- Increase monthly cash flow
- Solidifies the price well before the sale date – good in a slow market
- Ask tenants to take care of the property they intend to buy.
- Receive option money up front and hold it, in case the tenant does not exercise the option
It’s also a great marketing tool for sellers when trying to find buyers with lease options. For example, you contact a corporate relocation office about your property and they recommend a new employee to the area to lease your property. After six months, she stays with the new job, wants to buy her property, and the conventional lease changes to a lease option. The buyer secures the option to buy the house and you have a quality tenant (buyer) living in your property.
Lease option contracts can sometimes be complex, and advice on real estate lease options suggests contract language that focuses on the terms of the contract, rather than just price. To ensure a smooth closing put everything in writing. Finding buyers with lease options is indeed a time investment and a good buyer in hand is worth two in the bush.
It may be obvious, but advice on real estate leasing options encourages sellers to thoroughly research the market to predict the value of the property in the future. So, while you’re trying to find buyers of lease options, take the time to properly forecast the sale price. In addition, the Real Estate Lease Option Tips recommends investigating the laws in your state to ensure compliance with the regulations on the lease option mechanism.
For the seller, the secret is to find buyers with lease options who value the merit of this financial vehicle. How do you find buyers with leasing options? Place an ad in the newspaper or contact a corporate relocation office to help you find buyers with lease options. Meet with interactive mortgage bankers who can help you find leasing option buyers.
Another option is to contact real estate investors like us here at Buy-Sell-Michigan-Real-Estate. [http://www.buy-sell-michigan-real-estate.com/rent-to-own-home-in-michigan.html] and have us find you a buyer for your property. We make it very simple for you thanks to our experience. We charge a small allocation fee for our efforts and it takes the marketing work out of you.
The Internet is also a great way to find buyers with lease options. The same Internet sites that help sellers help buyers, bridging the gap between two parties searching for each other. However, these sites often have steep fees that they charge potential buyers of your home.
You can also join a forum that shares practical advice on real estate leasing options. Information like these tips on real estate leasing options and how to find lease option buyers are available if you search hard enough.