Q. I want to build a property portfolio using lease options. Should I include more traditional methods of buying with my lease option strategy?
A. If you have the skill set and knowledge to use a lease option strategy to build a property portfolio and create wealth without the burden of ownership, would you ever really need to buy in the more traditional way? Of course, this question is raised to encourage you to think about property investing in a different way, and doesn’t necessarily imply that buying property is wrong or an inferior solution. Sometimes buying is best – there are some option properties in my portfolio I want to buy or sell on this year, possibly through a JV partner, just because they are such good deals and we are already well in to the option period. I have already built up healthy credits and want to have that considerable created equity credited to me.
We might agree with the experienced investor, however, who teaches how powerful having the skills and support to adapt can be. The investing scene is changing, like the stage of a play between acts, and we need to consider changing in order to keep up. That is how we can harness this amazing opportunity.
So, if it is more profitable for you to piggy-back on existing finance, (using property lease options) then that should certainly be a consideration. Lease options are an almost perfect investing tool when finance is limited or Lender requirements are strict.
So there are no hard and fast rules. If you can buy at a respectable discount and that is the best solution for the seller who needs money out now, and you have cash or an affordable credit line (some of our friends have already become banks in their own right and can write their own mortgages), then buy. But if you recognise that now is the time to invest in property but finance is scarce, then controlling property using property lease options is an excellent way to invest.
So, should you combine more traditional methods of buying property with your lease option strategy? You don’t have to, but if that is a win-win, why not? The important thing is to have the choice and skill, (and many don’t) to fully benefit from a lease option strategy.