For the investor or home owner, the lease option is a popular method for investor or home owner to sell property and receive profits. These lease option techniques are provided to help both the buyer, the seller, and for the investor, such techniques as the sandwich lease and flipping lease options. There are several lease option techniques, all customizable to your specific situation.
For the Seller, here are some lease option techniques to consider :
- Consider owner financing as a lease option technique especially if the tenant is motivated, but simply may have trouble in getting conventional funding.
- You can require an option fee from the tenant. Requiring even few hundred or a few thousand gleans out those buyers who are less motivated to perform the option.
- Consider contract terms such as maintenance and repairs. Then the subletting, the one of the popular flipping lease options, and extending the option deadline.
- The lease option can be a complex document and combines the situation of both the conventional sales and lease contract. Consider a real estate attorney to help you or he can also suggests some advice for you.
As a Buyer, here are some lease option techniques :
- Build an escrow account to protect your funds if the owner not honor your option. Most owners are honest, but why take the chance.
- Start early to secure financing, especially if you need to clean up your credit. If you can start early, the more time that you have is better for yourself. Remember, in most cases you won’t get your money back if you don’t perform your option.
- You must make sure that you agree with contract language to maximize your lease option techniques.
- Include a clause to assign the lease to a third party, if indeed you cannot find financing, you can assign it to someone who has.
- Have the document notarized and record it in public real estate records to encourage the owner to honor the option.
- The right to extend the option deadline gives you a cushion should the final closing day approach before you’re ready with financing.
- Consider sharing costs of maintenance with the seller, since you both have interest in keeping the property in pristine condition.