What is a Lease Option Agreement?

What is a Lease Option Agreement?

 What is a lease option agreement? 

A lease option agreement is a legal agreement that allows you to control and generate income from a property while also having the right (but not the obligation) to purchase it later. This is a great strategy (particularly for new property investors) as it allows you to invest without having to put up any money of your own.  

There is usually a few things to consider with this property strategy including the agreed fixed property prize if you decide to purchase the asset at the end, monthly payments to the homeowner and terms and length of the agreement. 

Here our co-founder Liam Ryan, deep dives into this lucrative property strategy: 

What makes lease option agreements a great property investment strategy?  

Lease option agreements have many benefits including allowing you to capitalize on a property without having to buy it outright. Plus, you don’t have to look far to find profitable deals in your local area. One way to do this is by reaching out to property owners who’ve not been able to rent or sell for the price they want, or have had their property on the market for a while. Ultimately, the benefits can be huge, here’s a few to consider: 

  • You can generate cash and start seeing returns immediately   
  • You have the option (not the obligation) to buy the asset or you can hand it back  
  • If the property has gone up in value, then you also have equity  
  • If purchasing the property, you can do so using none of your own money  

Other property strategies our candidates are using to make life-changing income: 

  • A house in multiple occupation (HMO) is a property that is rented out to at least three people who are not from the same ‘household’ (for example, a family), but share facilities such as the bathroom and kitchen. It’s also known as a ‘house share.’ 
  • Deal packaging is a professional service in which you provide a package full of services such as research of the area, price comparison with competition, offers such as the most profitable investment-type of that particular area, and many management-related offerings. The deals are then sold to investors based on their requirements. If the investor requires cost-effective and time-saving investments, the deal should include them as well. 
  • Commercial deals – non-residential property investment with the purpose to lease or sell properties for business purposes.   
  • Land development deals – the process of purchasing land with the intention of either developing and building on it or holding onto it for long-term appreciation.

 

Getting started: FREE property investment training  

Not sure how to get started with lease option agreements or any of the property investment strategies mentioned? Register for a FREE property training event to learn first-hand from Forbes-featuredindustry leading experts with experience in building 8-figure property portfolios. Book your spot now via the link below: 

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