It doesn’t matter if you’re a buyer or a seller. Lease options are both good & bad.
The Good As A Lease Option Buyer –
- You can earn your down payment and closing costs by giving the seller/landlord a larger deposit
- You can get credit each month from the rent you pay that you can also use towards your down or closing costs
- You can try out the house before you buy it
- If you decide you don’t like the house or the neighborhood, you don’t have to buy the house
- The landlord/seller can’t sell to anyone else until you decide you don’t want to buy the house
The Bad As a Lease Option Buyer –
- You don’t get your deposit back if you don’t buy the house
- You don’t get your monthly rent credits back either
- You don’t get the tax write-offs like you do when you buy
- You can be evicted if you don’t pay because you are still a tenant
The Good As A Landlord/Seller –
- You get a larger deposit from your tenant buyer
- You may get a little more rent each month that you only have to credit the the tenant buyer for if they complete the sale
- You get a tenant who will take much better care of the property because they hope to own it
- It’s easier to get rid of a bad tenant that it is an owner financed buyer because you can evict them instead of foreclose on them
- You can sell the house at a retail price instead of competing with the bank owned or short sale properties in the neighborhood
The Bad As A Lease Option Landlord/Seller –
- The buyer is still just a tenant and you are still a landlord
- Depending on your arrangement with the tenant, you may still be responsible for the maintenance and upkeep of the house
- You don’t get all your money at once
Lease optioning a house can be very beneficial for both sides of the deal. Make sure to do your homework, get it in writing about who takes care of what (utilities, upkeep, repairs, etc.). Know the risks on both sides.
Now go lease option a house.