Lease options offer would-be buyers a specified amount of time to qualify for a conventional mortgage before they purchase a property while enjoying all of the perks of homeownership.
The benefits of the rent-to-own arrangement far outweigh the risks for savvy sellers. So, read on as we explore using a lease option to sell your house in Fort Myers.
Option Fee and Rent Premiums
A lease option with an option fee can be a beneficial arrangement for sellers like yourself in Fort Myers for a couple of reasons. Let’s break down how it works:
- Exclusive Right to Buy and Secured Income: The option fee grants your tenants the exclusive right to purchase your house at a predetermined price by the end of the lease term. This means you won’t have to worry about finding another buyer during that period, and you’ll have a guaranteed renter. The option fee itself is a non-refundable sum that the tenant pays in exchange for this exclusive right. So, even if they ultimately decide not to buy, you keep the fee as a profit.
- Steady Income and Potential for Gain: Throughout the lease term, you’ll also be collecting rent from your tenants. This provides you with a steady stream of income, similar to a traditional rental agreement. On top of that, lease option agreements often involve a rent premium. This means the rent amount is typically higher than what you would charge in a standard lease because it partially goes towards the eventual purchase of the home. So, not only are you getting guaranteed rent, but it’s also at a slightly higher rate.
In essence, a lease option with an option fee offers a win-win situation. You get a qualified tenant, guaranteed income, and potential profit from the option fee, while your tenants have the flexibility to try out the house before committing to buying it.
Savings
A lease option to sell your house in Fort Myers can be a strategic move, offering financial benefits while you wait for the right buyer. Here’s how it works: By leasing the property with an option to purchase, you’ll receive monthly rent throughout the lease term. This rent can cover the majority of your holding costs, which typically include mortgage payments, property taxes, and insurance. Essentially, the tenant is helping to shoulder the financial burden of ownership while you retain the property. The real win comes with appreciation. If the market in Fort Myers is appreciating, the value of your house will likely increase during the lease. This means you’ll be able to sell it for a higher price when the tenants exercise their purchase option, or when the lease ends and you choose to sell on the open market. In essence, you’re getting paid to hold onto an appreciating asset – a great way to build wealth! There is a risk, of course, that the tenants might not choose to buy. However, you’ll still have benefited from the rental income and potential appreciation during the lease term, minimizing the downsides of a vacant property.
Buyers
Buyers seeking rent-to-own properties may require time to get their credit ducks in a row and build up a downpayment. Or simply wish to test drive the property, intending to remain in their home for decades to come; often, buyers are willing to take the financial risk of the lease option after having experienced bad neighbors or other issues with another property. Whatever the reason, you’ll open your property up to a real estate market sector where properties are in high demand, and you can realize significant returns by using a lease option to sell your house in Fort Myers.
Management
You should ensure the option and the lease remain as separate contracts. For sellers, there is very little management of the property itself involved when you’re using a lease option to sell your house in Fort Myers. However, your tenant screening system could make or break the deal. Working with seasoned real estate investors like the professional home buyers at Core Real Estate Properties and their property management team means you’ll have the best tenants.
Risk
You should be upfront with your lender about using a lease option to sell your house in Fort Myers to ensure there are no conflicts with your mortgage’s due–on–sale clause. In addition, acquire a home warranty that covers significant repair work or requires the tenants to pay for one to protect your investment. Typically in these agreements, the tenants are responsible for repairs up to a certain amount. Additionally, as a real estate investor with residential rentals, you must remain on top of the laws governing your properties and any changes in those laws, along with an intricate knowledge of the Fort Myers market, future city zoning, and economic planning to keep your portfolio as healthy as possible. Finally, it’s advisable to team up with an active local professional investor like the professional home buyers at Core Real Estate Properties, keeping you ahead of the game so you can adjust your investment strategies and keep your portfolio healthy.
Ready to sell your house in Fort Myers? Core Real Estate Properties is ready to buy, giving you your asking price via rent-to-own. Why wait? Our contract terms are simple, and we believe in total transparency; if you have questions about the process, we’ll answer in full detail with no obligation. At Core Real Estate Properties, we’re your neighbors here in Fort Myers; we’re proud of the work we do every day to help our neighbors and improve our community. At Core Real Estate Properties, our professional investors will make a deal you’ll feel good about long after you’ve left the closing table. Call Core Real Estate Properties at 239-360-3176.