In the last blog post I talked about how property lease options can often make sense for renters and those who are looking to buy property. However, landlords can also reap the benefits of property lease options in many different ways. Here are just a few of the advantages that property lease options can bring.
Lease Options Draw in Reliable Tenants
The prospect of unreliable or untrustworthy tenants is one that worries many landlords. With lease options you are much more likely to attract reliable tenants who will take excellent care of the property. Why? Because they are working towards buying that property for themselves, and consider it a real home rather than just a place to live.
Lease Options Insure Against Risk
One of the side benefits of these reliable tenants is the fact that they are committed to living in your property for the long-term. This means you have much less of a risk of needing to evict tenants or of having the property lie empty while you search for tenants to replace those who choose to leave. In the ideal situation you will have a guaranteed income for the duration of the agreement, followed by an injection of cash as the lease option is redeemed and the property is sold. However should your tenants be unable to purchase the property when the agreed period ends, you have still enjoyed a long tenancy in which the property was well maintained.
Lease Options Make You More Competitive
In a conventional property sale your pool of buyers is restricted to those people who are already eligible for a mortgage and have saved the deposit that they need. In order to entice in buyers in a competitive market your only real option is to discount the price of the property. However, with a property lease option on the table your property is suddenly of interest to a much wider pool of potential buyers. Many people who would not be offered a mortgage today would certainly be eligible for one in five years when they have saved a large deposit. Offering a lease option can be a great way to up the appeal of your property without needing to take a hit on the price.
The more you learn about property lease options the more you will see just what a good deal they can be!
Hi,
I would tend to agree with your article here Mark, especially insuring against risk. In my limited experience I have always found tenants who are wanting to rent to buy are far better than a general buy to let investment (which I have a few too). I think the mindset for someone taking a rent to buy using lease options is far more settled, they look after the property better and they tend to always pay in full and on time.
You conclude nicely that even if the tenants do not buy for whatever reason you have enjoyed a longer period of full occupation and the property is probably in far better condition than perhaps it would have been.
Best wishes
Jen