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Beneficial Lease Option Tips

Lease option tips benefit the seller and the buyer in an equal manner. they help in making a finance required for the transaction of a home deal. The lease option permits the tenant to buy the involved property within a time period of twelve to twenty four months.

Lease options are a good source for purchasing homes for the first timers of home buying who have not qualified for the finance options. they give the buyer’s time for getting their finances in shape for purchasing the property. The lease options are great marketing tools for the sellers of properties for finding good buyers.

Benefits of the Lease Options:

There are various benefits for the buyers as well as the sellers of the lease options. The lease option tips for the buyers are listed below.

  • The tenants get the facility of paying a small amount upfront for the house. This amount is smaller than the normal down payments.
  • The risk of a monthly credit rent helps in generating the down payment, resulting in a savings account for the buyers.
  • The buyers can enjoy the benefits of living in the house that they dream of now instead of renting an apartment and waiting to repair their credit.

But, this convenience isn’t available without costs. an option fee has to be paid by the buyers, additionally to any potential rent credits and the monthly rent. The seller will keep this money if the buyer isn’t able to work out the option.

The lease option tips for the sellers are as follows:

  • This option will increase the monthly flow of cash for the sellers.
  • This also helps in solidifying the cost of the property before the selling date. This rate of solidifying is good in the real estate market.
  • The lease option prompts the tenants in taking care of the property, as they have the intention of buying it in the future.
  • The sellers receive cash direct and can retain it if the tenant fails to exercise the option.

The contracts of the lease options are sometimes very complex in nature. the tips of lease options recommend that the language of the contract has to focus on the contract terms, rather than the price. The finding of buyers for the lease option, demands a considerable amount of time investment on part of the sellers.

But the lease option tips are an encouragement for the sellers to investigate the markets thoroughly for predicting the appreciation of the property’s value in the future. Hence, it’s recommended that the sellers invest time in forecasting the price of selling along with the search for prospective buyers of the lease option. Laws of the state have also to be investigated for ensuring abidance with the regulations for the mechanism of the lease options.

Source: ezinearticles

Basics of Lease Option

Lease option strategy is used for selling properties in a hard market where there are only a few qualified buyers. If the property is easy to sell then it’ll be more convenient for you to sell the property in the conventional way wherein the buyer pays you cash for the purchase.

Benefits of Lease Homes with Option to Buy

  • It is a good way for you to sell a vacant property at market value on that you’re paying a mortgage.
  • It helps a buyer with a poor/ no credit history or down payment to buy a home. Such buyers will not qualify for a home loan from a bank. These buyers get the benefits of home ownership.
  • Although the client will be making higher lease payments that may exceed market rent they will be making payments towards their down payment.
  • The buyer gets the benefit of capital appreciation on the property during the period of home lease to buy.
  • For the buyers who lack self discipline will have the benefit a forced savings plan because part of the rent is credited toward the purchase price of the house which is adjusted at the end of the lease possibility agreement.
  • As opposed to a normal tenant a home lease to buy renter pays won’t only look after the property as his own but can often make improvements to the house.
  • A lease with option to buy tenant will also pay all the outgoings on the property which will lighten your financial burden and risk considerably.
  • If the lease option purchaser defaults, you as a seller are not obliged don’t refund any portion of the lease payments or the option money unless and otherwise it’s specified in the contract. You will also retain the right to sue purchaser for breach of the agreement.

Source: ezinearticles

The Benefits of Owning Rental Properties

Some of the benefits of owning these investment properties are:

  1. Monetary Benefits

Monetary benefits are those benefits that are directly measured in terms of the cost or returns on the property. The main interest here is how much money can be earned from owning a particular rental turnkey property. It can be divided into three basic benefits:

  • Cash flow: This is the money that will be left after settling taxes, debt service and operating expenses. It is the cash flow of the business and there are some things that could influence the income you can get from owning an investment property. Some of them include market competitions such as how developed is the location of your property and a sudden change in the market. In all of this, if the amount of revenue received from the business exceeds the amount of money spent, the excess is your cash flow.
  • Appreciation: This is often described as the nominal increase or rise in the value of a property. When the value of a rental property increases in absolute dollar terms, it is said to have appreciated. This normally occurs if the rate of increase in the value of a property exceeds the current inflation rate in the market.
  • Financial Leverage: This is the benefit received from the use of other people’s money (borrowed funds). This borrowed fund usually cost less than the return earned from its use. The investor will thus have control over a much larger investment.
  1. Non-Monetary Returns

These are the benefits that cannot be measured directly but by the investor’s personal investment aims and opportunity cost linked with a particular benefit. The benefits are as follows:

  • Pride of Ownership: When you are the owner and controller of a turnkey investment property, there is this pride that comes with it. As a result, you can confidently manage and make decisions concerning the property.
  • Diversification: Investing in real estate can be a way of diversifying your investment portfolio to ensure that the risk is shared across different kinds of investment businesses.
  • Security: There is this sense of security that comes with owning a rental investment property. There is a collateral attach to real estate, which can’t be found with stocks.

All these benefits ensure that owning a rental property can help you achieve your financial goals by creating a secure source of passive income. It’s all about getting educated and taking some risks.

Article Source: EzineArticles.com

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