The realestate lease purchase option -- also called a rent to own -- can reap profits for the savvy seller, especially in a slow housing market. Here are some lease option to buy explanations that can give you the confidence of an expert in this creative financial technique.
To maximize the realestate lease purchase option requires one to take a look at the immediate situation:
• Is the housing market slowing down in your area? Secure a buyer now at today's market rather than at a lower price several months down the road.
• Has your property sat vacant, trying to find a conventional buyer? Offering the realestate lease purchase option opens the door to buyer/tenants anxious to move in now.
• Do you have a qualified buyer/tenant either in your property or ready to move in? Qualified buyers are the ideal candidate to work with. Lease option to buy explanations maximize the seller's outcome with qualified buyer/tenants.
• Are you ready to increase monthly cash flow and cover the PITI of your property? Exercising the realestate lease purchase option will increase monthly cash flow through rent credits, which is covered below in lease option to buy explanations.
If you're ready to exercise the realestate lease purchase option, have a buyer/tenant ready to move in, a contract will be your next step. Lease option to buy explanations assist both the buyer and the seller into a win/win situation.
• Payment - most payments involve an option fee paid to the seller upfront. Not to be confused with the security deposit tenants pay to move in.
• Option fees - paid upfront to the seller, viewed as a commitment of the buyer/tenant to the realestate lease purchase option.
• Rent credits - applied to the final down payment, paid monthly by the buyer/tenant at a rate higher than the market rate to cover your PITI (principle, interest, taxes, and insurance).