Should You Pursue Lease Options To Purchase a Home
The real estate market is a place
where people can get very creative. This brings us to the rent with option to
buy programs you see on the market.
Should You Pursue Lease Options To Purchase a Home by Atrium Properties:
Leasing is a fairly popular form of living arrangement since it basically
involves renting over a pre-set period of time, usually 3, 6, or 12 months at a
time. Leases provide lower rates than a month by month rent. However, when
looking to lease, one will often come across the “Lease Option.” A lease option
is essentially the same thing as a lease except that it provides the option to
purchase the property at a future date.
The option is just that, an option. It may be an interesting offer for some
renters who are giving Clifton Park
offices for lease, but others will want to pass it up. The option does not
have to be taken, since there is a fee required to purchase the option. Although
the amount can vary, the fee is usually up-front and paid when entering the lease.
In general, lease options are offered in times of slow real estate markets,
since generally owners of property look to simply sell during the hot times.
There are some definite advantages and disadvantages when it comes to a lease
option. On the downside, the lease option is rarely exercised and therefore it
ends up being money wasted. Many people pay the money thinking they will buy
later and then either lose interest or find they can’t qualify for a mortgage.
When this happens, the money paid to purchase the option is lost and you will
be wondering what you could have possible been thinking when you entered into
the agreement.
An area where a lease option is commonly used is real estate investment. In
such a situation, a real estate investor believes he or she can flip the home
in a short period for a profit. They find the lease option to be very
attractive because it allows them to secure the home without dedicating
significant cash resources to the deal. Once they purchase the option, they
then start hunting for a buyer that will pay more than the seller is looking
for in the original sale. If the investor can pull it off, they exercise the
right to buy and immediately sell to the third party. In many cases, the two
transactions will happen at the same time! This leaves the investor with a
smile on their face and the original seller in a grumpy mood.
As with anything, there are upsides and downsides to a lease option. For
investors, it makes sense in many situations since it frees up cash flow with Clifton Park office rentals. For
people looking for a place to live and raise a family, it rarely makes sense.
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