Buyers And Sellers Both Profit With Lease Options

Lease options is one of the best ways to profit in the real estate market, even in a slow market, or when property sales are tough. A lease option is a simple, non-bilateral contract, just like a regular property contract.

The contract is a standing agreement between the seller and the buyer stating that the seller cannot sell the property to anyone else, but the buyer does not have to exercise the option if they so choose. The seller has a set amount of time until they must buy the property, renew the lease or vacate the property so it may be sold to another buyer.

Everyone Wins

For an investor in the real estate market, this is a great way to gain control the property without spending very much money at all. In addition, you also have the option of getting out of the deal with little risk if the market becomes unfavorable. Should the market see a great rise, you will be in a great position to buy the property at the agreed fixed price. You will make an awesome profit by selling the property quickly.

The wise investor will look into finding a way to sub-lease their property. You will be able to maintain control of the property, yet make a profit from the incoming rent. However, this option may not be available in all circumstances. Be sure to read your lease agreement thoroughly to determine what your options are exactly. This should be done before you sign the contract so you do not become stuck in a non-profitable situation.

The seller also profits greatly with lease options, because only five percent of lease options are ever exercised. The majority of sellers receive a small down payment on their contracts and monthly rents are usually higher. The extra money for the monthly rent goes toward the overall price of the property, if the option is not exercised, the money goes in the seller’s pocket as profit.