What Have I Done?

upstatenylandlady profile photo

Hi all!
I have 2 sfh that I usually just rent out. Last time I filled them I collected a non refundable option fee of $2,000 and did a 10 year lease. At the end of the 10 years I gave them the option to puchase the home for $10.00. They are responsible for all maintenance and repairs. I determined the rent amount by deciding what I would "sell" the house for, 10% interest, 10 year term, and then added on the taxes and insurance. All stays in my name and I pay taxes and insurance.

Is this a lease option?
At the end of 10 years when I "sell" the house for $10.00 how will the tax treatment be?
Any suggestions for doing this a better way.
I LOVE not getting repair calls on these! It seems to be working well.
Thanks in advance, Amy

Comments(3)

  • LeaseOptionKing28th April, 2005

    Offer 2:1 rental credit to increase rents OR just tell the T/B in order to get them qualified in a year, they have to prove to the lender they can afford the mortgage by paying rent comparable to what a mortgage payment will be for them in a year.
    [addsig]

  • LeaseOptionKing29th April, 2005

    What did your ad say?
    [addsig]

  • lcboone2nd May, 2005

    What is a 2:1 rental credit?

    LB

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