What is a Lease-Option AKA Rent to Own
A lease-option, AKA Rent to own, is a type of agreement that allows a tenant to rent a property with the option to purchase it at a later date. If you are considering a lease-option, here is an overview of the process:
Finding a property: Start by looking for properties that offer a lease-option arrangement. You can search online, work with a real estate agent, or contact landlords directly.
Qualifying: To qualify for a lease-option agreement, you will typically need to have a stable income. You will also be required to make a down payment. It is important to carefully review the terms of the agreement and ensure that you are able to meet the financial obligations before signing.
Making a down payment: Lease-option agreements require a down payment, which will go towards the purchase of the home. This can be a smaller amount than a traditional down payment, but it is still important to save up and be prepared.
Paying rent: During the lease period, you will be responsible for paying rent as you would in any other rental agreement. A seperate monthly payment is made and will go towards the purchase of the home. Think of it as a forced savings plan towards your downpayment.
Exercise the option to purchase: At the end of the lease period, you will have the option to purchase the home. If you decide to do so, you will need to pay the option price and any closing costs. If you decide not to purchase the home, you will typically forfeit the down payment and any other credits you have accumulated.
It is important to carefully consider the terms of a lease-option agreement and make sure it is a good fit for your financial situation. It is also a good idea to consult with a real estate attorney or financial advisor to ensure you are fully informed and protected.
-Cardon Real Estate
