Lease-Option Your Home or Property
First off what is a Lease-Option? A lease-option is an agreement made between a buyer and a seller that allows the buyer to lock in a future purchase price, save money for a down payment and buy the property in the future at current prices. This option is usually a win-win situation for both parties.
How can I Lease-Option My House?
If you do not have a lot of time to get your home lease-optioned out, it is recommended that you contact a realtor or and professional real estate investor, but whether you are a landlord feed up with the woes of renting or a desperate homeowner looking for relief from your mortgage payments a good and experienced realtor or real estate investor can help.Click here to contact an investor
Usually an investor will sign a lease contract with you a homeowner with an option to purchase the property at an agreed price and at a latter date. The investor may then sublet your home to a pre-screened, pre-qualified individual(s). An experienced investor will ensure that these individual(s) are not looking to rent, but have a genuine desire to own.
Usually people that rent to own tend to care for the property much better then a person who just wants to rent. They are very aware that they will own this house soon. After their lease contract is up the renters may purchase the house at a previously agreed to price. The investor will exercise their option with you the owner and then sell it to the renter/buyers.
Below are some Q&A about Lease-Options:
- Why don't I just list with a realtor?
- Can't I just do this myself?
- What about the future equity?
- Can you guarantee that in 5 years you will buy my house?
- What if my house is damaged during the lease period?
- How do you market the house?
- When can you start making payments to me?
- What if I don't need debit relief and can wait to sell?
Q. Why don't I just list with a realtor?
A. You definitely have that option if you so choose, but remember a realtor will not make your mortgage payment for you while they are listing your property. An investor will guarantee a monthly payment, pay you top dollar for your property and perform all the maintenance and management. All you have to do is sit back and forget about your property until the closing agent sends you the closing documents and a check.Top
Q. Can't I just do this myself?
A. Absolutely, but usually an investor has experience with structuring this type of situation so that it goes smoothly for all the parties involved.Top
Q. What about the future equity?
A. By agreeing to pay you close to your full asking price, the investor's only motivation for the deal is profiting from the future appreciation of the property. Investors are in business to make a profit as well as helping people.Top
Q. Can an investor guarantee that in 5 years they will buy my house?
A. NO, not usually, but for the most part because investors takes the time to carefully screen their tenant/buyers, the majority of them will purchase the house. However, what you look at to be the worst-case scenario may not be as terrible as you think. 5 years from now you will have benefited from someone else making your payments, maintaining and managing your property. Your principal will have been paid down and you have been able to receive all of the depreciation benefits and write offs. What you haven't had is the worry and the headaches of making the payment every month or the responsibly when something goes awry with the house.Top
Q. What if my house is damaged during the lease period?
A. Investors usually make sure the house is fully covered by a home warranty and even require their tenants/buyers to purchase renters insurance to cover the rest. Make sure you ask your investor specifically about this and make sure the contract contains a clause pertaining to this.Top
Q. How does an investor market the house?
A. Usually an investor has a list of pre-screened, pre-qualified individuals looking for homes to get into, once they get a house under contract they set up an open house date, that way they can respect your privacy as well as create a buying frenzy. They also market in newspapers, on the internet as well as with signs on the streets.Top
Q. When do investors start making payments to you?
A. It varies in each situation, but usually you can be relieved from your mortgage payments within 20 - 40 business days.Top
Q. What if I don't need debit relief and can wait to sell?
A. If you do not need immediate debt relief some options that may work for you are:
The Lease 2 Purchase Handbook and FREE CD