Selling on a Lease Option - Why?

If you’ve been trying to sell a home in a down real estate market you are probably having a hard time finding buyers and are looking for some options. You might be thinking about rent to own. But you might also be wondering what do I get out of selling on a lease option?

Here are some benefits to rent to own versus just renting out your home or waiting forever for a conventional buyer:

1. Higher Purchase Price - rent to own sales typically command a price premium over traditional sales. The buyer is paying extra for the flexibility he receives by not having to do an outright purchase immediately. Plus, let’s face it conventional buyers know what the market is like and they are beating up sellers over the price. When you are selling on a lease option you’ll find that most rent to own buyers accept your asking price without question.

2. Higher Rent - You may be able to charge more for monthly rent in a rent to own than you would for just a straight rental.

3. Cash Flow - If your monthly payments are less than the monthly rent, the difference goes in your pocket. That’s a whole lot better than paying a mortgage, utilities and maintenance costs for your home to sit empty while you wait for a conventional buyer to come along.

4. Option Fee - This upfront fee paid to you by your rent to own buyers is what secures the purchase price down the road. If the buyer closes on the home, it would be applied towards the purchase price. If the buyer elects to not purchase the home, the option fee is forfeited and still remains yours. Either way you win. If you were to just rent the home, the tenant would put down a security deposit. the option fee is different than a security deposit. A security deposit is owned by the tenant and can’t be used by the owner, except for repairing demages, unpaid rent and other provisions as mandated under state laws. The option fee is owned by you and it’s yours to keep - big difference.

Whether you are a home seller or an investor doing rent to own investing you’ll find that selling on a lease option has definite advantages for you.