Lease With A Seperate Option To Buy
I was told by my RE attorney that it is better to setup a standard lease and then fill out a seperate option to purchase that states if lease is broken or not fulfilled than all funds on the option to purchase are lost . He said that he uses this way incase he has to evict. My main question on this is who gets the tax deduction for the intrest paid on the mortgage payments at the end of the year. I have taken the property Subject To and will lease it out with the option. Do I get it, I know the Subject To seller doesn't get it because he isn't paying the mortgage. Can I offer my lease option cutsomer the credit and I take the intrest at the end of the year. How is this done. How should this be structured. He said he couldn't help me set it up because he also sell's all of his properties this way and doesn't want a conflict of intrest.
You don't know how many times I've heard things from attorneys that are wrong or just bad advice, but I'm proud to say that your attorney is correct. Always separate the two with your T/B. Your T/B gets no deductions; they are merely renting.
It took me long enough to find him. I'm glad that he knows what he's talking about.
thanks leaseoption
I prefer to sell properties via land contract (contract for deed, installment contract, etc). This enables the person to deduct the "mortgage" interest.
In some states this isn't wise so you should check with your attorney regarding the process to kick someone out on land contract.
In iowa it is simply a 30 day notice which is fine with me.
Thanks, I did check and it could take almost a year to get a CDF out of the property. On a lease it will only take 30 days, I can go down to the magistrate's to file and I keep all the option money. I was orginally going to do CFD but I don't want to pay for a mortgage for a year then have to fix the property just to start all over again.