Lease Purchase vs Renting Out

[Account Closed]

It seems that a lease purchase with stipulations to make the buyer responsible for repairs would be more advantageous than renting because the property owner wouldn’t be responsible for any repairs, they get a bigger up front payment from the sale of the option (which will help with vacancies) and if the buyer exercises the option at the end that’s a win too. What do you guys think?

[Matt Crusinberry]

@Account Closed, When we typically do our rent-to-owns (lease options), we still take care of repairs (in the sense of capital expenditures). It's still our property until they actually take it all the way to closing. The people are more inclined to take care of it a little better because they're going to own it. We still make the tenants take care of the majority of the stuff, and if they ruin something we fix it at their expense. We also charge a little more to rent as well, and tell them we're going to be giving it back to them. This allows them to have some closing cost saved when we go to closing. If not, we get to keep that extra money as well. We also take out cap ex, fixes, and vacancies. I hope this helps, and let me know if you have other questions on this topic. We do this a lot, and I know there are other's as well. Good luck!

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