Lease Options: As An Investment Strategy

More and more we are seeing Rent-To-Own properties popping up in the market. As the markets change and lending rules tighten, many families/individuals are getting bumped out. It is a dream that has been taught over the generations to own your own home. These people, who have been bumped out, are starting to look for creative solutions to get into home ownership.

This is where you, as investors, can help to provide them a solution to their real estate problem. Lease Options or Rent to Own can be that solution they need. Now what are the benefits from an investments standpoint doing a rent to own over a standard buy/rent/hold strategy?

There are many benefits that you can gain from a lease option. Lets first look at the typical hassles of a buy/rent/hold strategy on a single family investment property. When you own a rental property, it may not cash flow as much as you would like, or it could even have a negative cash flow. When a tenant moves out of your property, you will have to spend time with a vacant property, also effecting your monthly cash flow. Lastly, you are stuck with all of the maintenance and repair costs of the property.

With a Lease Option property, you can avoid a lot of these common issues. Your tenants are paying higher rents, because you are adding rental credit. You will have also collected an initial option deposit at the beginning the rental. Your tenants tend to stay in the property for the length of the lease, as they are aiming to purchase it at the end. This makes your vacancies next to NIL. Lastly, your tenants are responsible for taking care and maintaining the property, freeing you up for working on more deals.

As you can see, this is a great strategy to increase you cash flow, decrease your headaches as a landlord, and finally, helping others into home ownership. Good luck on your new Lease Option Strategy!