Lease Options
How do lease options work and what are the benefits?
Most lease-option agreements specify that
a portion of the rent on the property in question is applied toward
the purchase if the option is exercised. This is referred to as rent
credit. Institutional lenders accept rent credits as part of the down
payment if rental payments exceed the market rent and if a valid lease-purchase
agreement is in effect, a copy of which must be attached to the loan
application.
For sellers, lease options give them several advantages, especially
in a slow market. These include a monthly rent higher than market
rent, top-market value for the property and tax-free use of the option
consideration until the option expires or is exercised. Also, the
renter is more likely to treat the property like an owner, tax-free
use of option consideration until the option expires or is exercised.
Lease-options should be read carefully for details on transferring
the option and other important concerns.
For more information, get a copy of "How Lease- Options Benefit
Realty Buyers, Sellers, Agents and Investors," available for
$4 from Tribune Media Services, 64 E. Concord St., Orlando, FL 32801.
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to Seller's page
What is a lease option?
When a renter signs a lease with an option
to purchase the property for a specific price within a certain time
frame, that is called a lease option. In most lease-option situations,
a portion of the rent is applied to a future down payment.
Lease options are most popular among buyers who don't have enough
funds for a down payment and closing costs.
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Where do I get information on lease options?
For information on lease options, "How
Lease Options Benefit Realty Buyers, Sellers, Agents and Investors"
is available for from Tribune Media Services, 435 N Michigan #1500,
Chicago IL 60611, 1-800-245-6536,or "Publication House",
Burlingram CA. 1-800-736-1736.
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to Seller's page
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