What is a lease option?

When a renter signs a lease with an option to purchase a property for a specific price within a certain time frame, that is called a lease option or a rent to own. In most lease-option situations, a portion of the rent is applied to a future down payment.

Lease options are most popular among buyers who don't have enough funds for a down payment and closing costs.

Where do I get information on lease options?

Contact me. I'll track down listing that may have a lease options.

How do lease options work and what are the benefits?

A lease option is an arrangement with you and a seller to exercise the option to buy a house after you have rented it for a specific period. A portion of your rent would applied toward the purchase if the option is exercised. This is referred to as rent credit, which most institutional lenders will accept as part of the down payment if a valid lease-purchase agreement is in effect, a copy of which must be attached to the loan application.

If you are a seller, lease options can give you several advantages, especially in a slow market. These include a monthly rent higher than market rent and top-market value for the property. Also, the renter is more likely to treat the property like an owner.