Lease Options on Rental Properties! Pro-Tip Everyone Wins!
As a licensed realtor and a property management company owner I come across lots of interesting opportunities and each time I try to create a win-win-win deal. Meaning win for the Seller, Buyer and myself! There are so many opportunities in real estate that just sit undisturbed like a gold nugget just under the surface that ordinary people walk on and over every day but are too busy or so it seems to even bother to notice!
Today I created a lucrative deal for everyone. We had a property come up for lease and this property is over 1 acre and so when we have these homes on large lots I always ask myself how can we get more rent income on it being that it offers acreage.
In this deal I located a business owner who is in the bounce house rental industry and found out he rents a building for $12K per month to operate his businesses and store equipment. He also rents a home for $4K which totals $16K per month. We worked out a lease option deal whereas the renter will rent the home with option to purchase in the future, put down $25K for the option and pay 3x the current rental amount with some of that money paying down the house all with a 3-year balloon and 3-year lease agreement.
In this scenario Renter can purchase the home at the end of the lease at a predetermined price favorable to owner, renter lowers their existing monthly output by over $8K per month, owner gets a quick $25K and substantially more rental income over next few years and if renter defaults owner keeps $25K and additional rental income. We as a property manager earn more on property management fees due to increased rental amount, we make a real estate commission once it closes split by Buyer / Seller and everyone is happy.