Submitted by: Dianne Maquilan

Acquiring a piece of property is probably beyond the reach for some tenants. On the contrary, there is an option that you could give your renters to make it easy for them to purchase a property. If you are thinking about selling your house, you can sign an owner-client rental lease options that is an arrangement with your tenants to have the option of purchasing the real-estate after an adequate length of time. When signing this agreement, make sure you seriously consider to necessary details.

Description

1. A lease options is a contract that defines that the occupants will buy the real-estate over a particular time period, typically one to three years. You will collect a bigger non-refundable advance payment, or option payment, from the tenant, typically one percent to five percent of the purchase cost, and credit it towards the initial payment on obtain. In this period, the renter will be subject to a lease to rent the property for a particular monthly value. The renting value may be higher than market due to part of the rent, since accepted upon in the agreement, also would be included in the up-front payment. The value of the real-estate may be managed at the time that the contract is drawn up or the provision may say that it will be available at appraised cost when the rent to own duration has ended.

Terms

2. The lease should include all the details that your standard arrangement has regarding amount of rent, period, late charges and other pertinent provisions. NuWire Investor has recommended that you keep two individual agreements: 1 for renting then one for the rent to own to acquire. You must continue to pay for your house owner obligations, like property taxes and insurance. Moreover, identify an amount for maintenance, in case any, wherefore the renter will likely be accountable. Your option agreement should be clear that, in case the tenant will not finish the investment, the owner could keep the option charge and premium rental payments.

Advantages

3. Lease options can be a win-win circumstance for the property owner and renter. The property owner keeps the guarantee that the property will be for sale over a specified period, and, otherwise, the down-payment in addition to extra rent may be kept for compensation. Renters with a sense of property ownership will be occupying the real-estate throughout the lease. Furthermore, if the sale value of the property is restricted in the deal and the market depreciates, the owner would not lose equity.

Lease options enable the tenants to be able to enhance their credit scores and so establish a deposit for the duration of the terms. Occupants could possibly guarantee current market value and, if the term is long, the property may appreciate just before they acquire it. In addition to that they might be able to incorporate an “assignment” clause, that permits them to sell the deal to the real-estate before they buy it and keep the variance between the purchase and sales cost.

Disadvantages

4. The renter will not be contractually required to purchase the real-estate at the end of the lease period or might wish to buy, however does not be eligible for mortgage loans. As well, the tenants may be evicted for not responsibly paying rent or for otherwise breaking the lease. If the transaction does not move forward for any purpose, the renter will lose the option cost and rent premium, and the owner now must seek a new customer right after making desired fixing. Furthermore, if the property is available for more or less than market value, the owner or the renter will lose money in the transaction.

About the Author:

Lease Option Homes

is a marketing channel of Expert Realty Advisors, a company based in Phoenix, Arizona, with lease option sales as the main line of business. The company offers a

rent to own

program for newly-remodeled homes that are ready

Source:

isnare.com

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