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Forums » Rent to Own a.k.a. Lease Purchase, Lease Options » Lease Option details needed

Lease Option details needed Subscribe to Lease Option details needed

3 posts by 3 users

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Diane Menke

Contractor · Philadelphia, Pennsylvania


Forum_avatar_avatar-learninginpa

Icon_minipost Jan 28 '09, 05:03 PM

We have a property that has been a bit tough to rent out in a steady fashion over the years.

Its due for repairs and maintenance but rent rates make it tough to spend the money at this time.

Lately we have been getting many requests to lease option it. So I have some questions about that.

As to the "option" - what % of future sales price do we reasonably request to grant this option?

As to rent rates - currently set at $1375, do we maintain or increase this rate for the period of the lease/option? Do we or can we do annual increases in rent?

As to term of the lease option - I would be comfortable with 24 months and perhaps 36. Thoughts?

Would tenants under a lease option handle repairs or us the owner?

Thanks to you all.
Diane Menke

Edited: 06/26/2010 at 07:06AM


Curt Davis

Wholesaler · Memphis, Tennessee


Forum_avatar_avatar-curt
Pro

Icon_minipost Jan 28 '09, 05:27 PM

Diane,

You will need to figure out what the market value for the home is right now and figure in a percentage to come up with your sale price.

You can either leave the rent where it is or increase it $100 and tell them that the extra money will go towards the purchase of the home and it will help them with closing cost. I would not increase the rent every year. 24-36 month is good for the length of the lease.

Make sure you get a deposit of about $3000 on average ( non refundable but goes toward the purchase )

Tenants should handle all of the repairs. You are basically helping someone to become a home owner. They need to have all the responsibility of repairs. If they ever break the lease or pay late or move early you get to keep their initial down payment.

Hope that helped a bit.

Edited: 06/26/2010 at 07:06AM

Small_buymemphisnow_stacksCurt Davis, buyMemphisnow.com
E-Mail: crtdavis@gmail.com
Telephone: 901-881-0552
Website: http://www.buymemphisnow.com
Full Service Real Estate Investing in Memphis TN


Jay Koch

Real Estate Coach · Los Lunas, New Mexico


Forum_avatar_avatar-jaykoch

Icon_minipost Jan 30 '09, 05:01 AM

Diane,

I recently read a book by Wendy Patton called "Investing in Real Estate with Lease Options and Subject-To Deals." You can get it on Amazon.

It is written from the investor point of view, but you can use it to figure out what the investors are looking for.

Have fun...

jay

Edited: 06/26/2010 at 07:07AM


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