Lease Option to hold as straight rental

2 Replies

Hi Everyone, 

I'm a big believer in trying to simplify things, and I love the idea of controlling property without owning it.

Just curious what everyone thinks of using a long term L/O with very small Option fee and no rent credits to control property, but then just straight renting the house for cash flow rather than doing a sandwich L/O.

I'm not sure if the spread would be too thin, but my thought was I could do a lease for the PITI amount and then cover expenses up to say $200. Owners get the tax benefits of having a rental with virtually zero management headaches, I can cash flow each month and if the property appreciates over the option period I can look to actually buy it. Almost a trial to see how the property performs.

Certainly not going to hit any home runs, but seems like this could be a pretty simple way to control property for cash flow with the potential of some appreciation, with very little risk. From what I can tell the worst case scenario is owner and I decide it's not working and terminate the L/O early.

Any thoughts or anything I'm missing would be really appreciated.

Thanks

Lance,

Sounds like a plan. Just make sure you have an escape clause with the actual owner before moving forward.

Jim Sakalis

Love this idea and want to try it myself. Keep me posted @Lance H. if you end up doing this soon,

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here