Benefits of the Lease Options

Increasing the financial gains and reducing the risks are the main aims of an investor because these will help an investor to build his or her investment portfolio. If the investor could be a real estate investor and he invests in the Lease purchase real estate deals then the financial gains become more secure and the exposure to risk is also limited. The financial gains will become secure and the risk will also be limited because the lease purchase agreement will allow the investor to use the property and check the advantages and disadvantages after paying the lease amount to the owner. If there are too many disadvantages associated with the property and the investor feels risky to continue in the deal then he can withdraw himself from the deal.

The benefits of the lease options are not only to the investors but also to the sellers. The sellers also enjoy a lot of benefits from these deals. These deals are better than the regular rental arrangement. the benefits enjoyed by the sellers are explained below.

Higher amount of cash inflow or upfront payment

In the regular rental arrangement, the homeowners get only monthly rental but in the lease purchase deals, the homeowners are paid option fee. The option fee is paid upfront to the homeowner and is quite the monthly rental. So a homeowner has more profit in leasing his home rather than giving it to a renter on monthly rental.

Higher selling price

The total amount that a seller is paid for selling his property is more than he will make in the normal selling because the total selling price won’t only cover the total sale price but also the rental during the lease period.

Minimal Maintenance cost

The maintenance cost for the houseowners will be minimized because the total maintenance cost of the home will be shared by the tenant. The tenant is responsible to share the maintenance cost because the tenant is also considered as the partial owner of the property during the lease period.

Attract better tenants

The property of the owner will be maintained because the maintenance responsibility is shared by both the owners and tenants. The well maintained property would attract more tenants or the buyers and if this tenant doesn’t successfully close the deal then the homeowner will begin his deal with the next reliable and high paying tenant.

Tax benefits

The monthly income made from the lease purchase arrangement is classified as monthly rental income. The taxes are reduced because the rental income is considered as the passive activity income and these are the tax benefits to the homeowners.

All the benefits are more than enough to encourage any homeowner to sell his property through the lease purchase agreement.

Source: ezinearticles

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