A quick guide to lease to own
This is a convenient way for a renter to secure the right to purchase a property in advance for a set period of time. The Five most important things you must know about a Lease To Own Purchase agreement are:
- The buyer is paying some money(option) to have the right to purchase the property within a certain period.
- The purchase price is agreed at the time of signing the Lease To Own agreement.
- If the buyer ends up buying the property, the amount of the option goes towards the purchase price.
- In the case the buyer does not purchase the property within the time specified, the option becomes payable to the prospective seller and the agreement ends.
- Typically, the paid lease money does not go towards the purchase price.
This agreements are draft by attorneys because of the many variables that normally need to be considered. Many investors use this resource to resell flipped properties by also offering seller financing at very lucrative rates for them but relaxing a bit the credit requirements for the purchases.
Disclaimer: We are not attorneys and this post is not intended to provide legal advice but rather general information. If you need an attorney we can offer several options for you.