L/o Questions
I have a home I would like to l/o( maybe). What are the benefits of doing that vs. just selling it?
I bought for $112,000. Next door neighbor just sold the same model for $188,000. The house is 5 years old.
Please be specific in your answer. I am really trying to understand...
I would like to also like to acquire more property.
With a lease option you get the benefits of selling your house for more than what you would on the open market. The only downside is that the profit is spread out over a period of time and it is technically renting. Essentially you are renting it with the option available for purchase at a later date. For doing this you get a set percentage of each payment as profit and the rest goes towards the equity of the house.
If you do it from a percentage standpoint you will make more than even offering seller financing because the percentage that goes towards the equity versus what you are being paid should be phenominal, compared to the standard 5-12% annual interest. Also the equity payments dont go down as a typical mortgage does over time. You can also set the contract to include appreciation to make future monies when the sale happens. In short you make money three ways, payment above equity, appreciation, and down payment. If you sell you make the flat sale of the house minus what you paid for it.
Hope that helps,
Kyle
If you are a seller, lease options can offer several advantages, especially in a slow market. These include a rent higher than market rent, top-market value for the property and tax-free use of the option consideration monies until the option expires or is exercised.
Eric & Rosa
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