3 Tips to Make a Lease Option Work for You

A lease option can provide you with a good way to purchase a home in the future. However, if you do not handle the lease-option process correctly, it could end up costing you in the long run. Here are a few tips to make a lease option work for you.

1. Save Money on the Lease

With a lease-option agreement, you are going to be renting a property from someone for a specific amount of time. After the lease is up, you will be able to purchase the property for a certain amount of money. When you are negotiating, make sure that you try to save as much money for yourself during the lease portion as possible. Many sellers will be so happy to have located someone willing to purchase the property that she or he may give you a nice discount during the lease portion. Many of these people are not landlords and do not know what market rent should be. They are simply trying to unload a property that they have not had much luck selling. Therefore, if you can get a great deal on the lease payment, you could potentially save money so that you will have plenty available when it comes time to purchase the property.

2. Negotiate the Right Terms

At the beginning of the lease-option process, you will have several terms that need to be negotiated with the seller. At this point, you need to pay special attention to each individual term and make sure that you negotiate agreeably for yourself. For example, the amount of money that you pay in option money is completely negotiable. The seller might have an amount of money in mind for this figure. However, if you do not feel comfortable paying that much money, then you need to negotiate for a lower amount.

You also need to do your best to negotiate a fair purchase price for the property. You will be negotiating on the front end what the price of the property will be at the end of the lease term. Therefore, you could potentially negotiate a great deal on the price of the property overall. By the time the lease is over, the value of the property might have increased substantially. Keep in mind that the seller would not be offering a lease option if there were a large market for her or his property. Therefore, you should be able to get a solid price for the property.

3. Avoid Scams

Unfortunately, there are several scams that deal with lease options on homes. In order to protect yourself, you need to make sure that you do everything possible to avoid these scams. For example, some companies will advertise that they help people with bad credit find lease-option properties. In return for their services, they will ask for your personal information as well as a large up-front fee. In most cases, you are going to be better off working with an individual seller instead of an agency. If you do consider working with a business, make sure that you check them out through the Better Business Bureau before getting involved.