Skip to main content
No. of Recommendations: 1
b06mjb:
Most lease purchase deals favor the buyer.

Again, not if you are dealing with an experienced lease option seller. Generally, as a seller, you are going to collect a fat option fee up front, with a firm date for option expiration. You will also get to set a purchase price on the house that is higher than would be normal - if the buyer had the means and the credit, he would be buying in the conventional market.

It's a good way to control a property for little money down. If it goes up in value, you have captured that gain with less risk.

It is indeed a good way for the buyer to control the property for relatively little money down. However, that money is an option fee which will not be refundable and may be only partly applied to the purchase. The experienced lease/option seller will write an escalator clause into the agreement to ensure that he captures at least a big chunk of the appreciation.

The best deals are where you lease purchase a property for a few years and then sell at a nice profit without ever having to actually purchase the property

It is possible to arrange such a deal, if the seller is a sucker.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.