Advantages of Lease Option Real Estate Investing
This way of investing basically gives investors the right to have be in control of and profit from a property without owning it.
The advantages of Lease Option Real Estate Investing are :
Lease option real estate investing is a flexible way of investing because the terms of the agreement, such as payment amounts, payment dates, installments, interest rate, interest only payment, balloon payments, purchase price and other terms that are all negotiated between seller and buyer. The responsibilities of both parties are also negotiable. For example, if the investor don’t want to act in the capacity of a landlord, he can specify in the lease option agreement that tenant or buyer will be responsible for all minor maintenance and repairs and the original seller will remain responsible for any major repairs.
2. Financially Low Risk
Lease option real estate investing is a low risk financially, because you have the purchased the right to change your mind and let the “option to buy” expire, if the property fails to rise up enough in value to make a profit. Even if your tenant or buyer decides that not to buy the property, you have profited by a positive monthly cash flow from the tenant or buyer’s rent payments, and upfront non-refundable option fee.
3. High Leverage
Lease option real estate investing is a highly leveraged because you are able to get control of a property and profit from it now, even though you don’t own it yet. The fact that you don’t own it, also limits your personal liability and personal responsibility. Only if you decide to purchase the property by exercising your option to buy, would you take title to the property.
Finally, the more thing that you understand from creative real estate investing strategies and apply them for now, the more profits you will get in today’s real estate market.