Advantages of Lease Option investing
Lease Option also commonly referred to as ‘lease to own’ is the point at which a property owner gives the tenant the choice to purchase the property towards the finish of the rent. The tenant pays the fixed price in installments. Generally the tenant is given a time period and cost in which he or she has to purchase the property. This is a valuable technique for purchasers since they have the choice to keep leasing or purchasing, however, the seller of the property cannot sell the property to any other person.
Lease-options include a rental credit that benefits the buyer towards the purchase of the home. If the buyer pays the rental amount, due each month, a portion of that rental payment is credited back should the tenant decides to exercise his or her option to purchase the property.
Lease Option investing is putting up a remarkable trendy expression in real estate. Quite a while back it was different. Realtors didn’t consider Lease Option investing a good method of investing for their clients. Nowadays, advertisers the whole way across the nation have changed. Now, Lease Options have become a viable way to invest and are desired by many sellers and buyers in the marketplace.
Lease Option investing is preferred by masses in today’s time because it has a lot of benefits for both the buyer and the seller.
1- Time to prepare a down payment
Lease Option is a very good opportunity for those tenants who do not have enough money when they are in need and cannot pay the mortgage. This option gives the buyer an advantage that they can pay the lease payment in installments and also gives the tenant enough time to prepare a down payment.
2- Settle before shifting
Lease to own is beneficial in one other for the buyer that if a buyer is moving in a new home and is waiting to sell a property to fund the new one then a lease to option gives the opportunity to settle in the new home until they are able to completely purchase it.
3- Analyzing the neighborhood
Lease Option investing is basically a way in which a buyer can also test the neighborhood before completely shifting. The buyer, while paying rental installments can analyze the locality in which he or she is deciding to settle in.
4- No increase in payment price
The value of a land increases with the time. Similarly, the costs and prices of the properties also rise. But when you are leasing a property a purchase price is fixed at the beginning in the contract. This is a very good opportunity because the buyer won’t have to pay additional costs of appreciation of the property.
Lease Option gives the buyer a sense of ownership but if a buyer fails to pay rental installments within the due to time because of any reason the owner has the right to evict them which is significantly less expensive and considerably quicker.
2- Greater tenant responsibility
If a property is leased and the tenant is paying rental installments monthly in due time eventually he or she will own the property. This way the tenants will take a good care of the property.
Lease option period is typically around 3 to 4 years. While buying or selling a leased property communication is very necessary between both the parties. A highly experienced mortgage professional is required while leasing a property so that the seller and the buyer can be brought to one page easily. Lease Option investing in real estate mostly benefits the buyer and gives them more control and liberty. While sellers are mostly forced into leasing their property in light of their failure to buy a property.