I've been curious about this for a while after reading a few books.
When you are lease optioning homes to tenants/buyers, what percentage actually end up exercising the options?
Does it even matter?
If it does matter, are there ways to improve the likelihood that a tenant will exercise his/her option?
You definitely have some control over this. Consider:
- If you run a credit check, you'll know how close (or far) the tenant is to being able to qualify. If the tenant has a recent bankruptcy or foreclosure on his report, you can be fairly certain he won't qualify anytime soon;
- If you require him to use a credit repair service (or better yet, pay for it yourself), you can be sure that he is at least getting good advice about how to improve his credit;
- If you check past landlord references, you'll get an idea of whether he plans to stick around or leave in 6 months, and you'll have an idea if he'll continue to pay his rent on time while he's there. The longer he stays and the more he pays into escrow as the down-payment, the more likely he is to be serious about buying.
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