Listing my first rental, lease option, advice needed

Investor · Destin, FL · Member since 2024 · 40 posts · 15 votes

Hello,

With the market being slow and our flip not selling I'm going to list it for rent.... however, I'd like to have someone who is ultimately interested in owning it and want to offer a lease option to buy, after one year. I can't do that out the gate because of lender refinancing.

What should I be aware of, and leery of? Where have people had the best luck finding tenants/buyers that fit this bill? How do you structure the agreement? What requirements do you personally look for when screening?

First time doing this so bear with me. Not new to investing just new to this part of it. TIA :)

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Patrick O'SullivanBusiness Member

Property Manager · Phoenix, AZ · Member since 2024 · 559 posts · 213 votes

9mo

Congrats on the property, Sonja. Lease options can work really well, but they do take some careful planning.

Screen tenants like buyers. Check income, credit, and job stability. Ask for a solid option fee upfront to make sure they are serious. Keep the lease and the option agreement separate and clearly outline the purchase price and terms. Decide ahead of time if they can make changes to the property.

Legal review is important, and for marketing, be clear in your listing that it is a lease with a future purchase option. Overall, focus on protecting yourself while attracting tenants who have the means and motivation to buy. With good screening and clear agreements, this can work very well.

[email protected]480-795-7938

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Tim KirkPro Member
Member since 2026 · 88 posts · 53 votes
9mo
Sounds potentially complicated. Probably worth having an attorney involved
0 Reply
Wells Mensah
Member since 2026 · 3 posts · 1 vote
9mo
You'd be looking for a veryyyyyyyy specific type of renter. probably a young professional, in a relationship, of settling age, and in a money printing sector like tech, banking, investments
1 Reply
Ken M.
Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
9mo
Quote from @Sonja Revells:

Hello,
With the market being slow and our flip not selling I'm going to list it for rent.... however, I'd like to have someone who is ultimately interested in owning it and want to offer a lease option to buy, after one year. I can't do that out the gate because of lender refinancing.
What should I be aware of, and leery of? Where have people had the best luck finding tenants/buyers that fit this bill? How do you structure the agreement? What requirements do you personally look for when screening?
First time doing this so bear with me. Not new to investing just new to this part of it. TIA :)

First you want to follow Dodd-Frank, then make the lease date and the option date the same date and length of time, qualify the same way you would as a lender, get as much of an option fee up front as you can, don't give access until they have paperwork and fees have been collected, decide if you will allow alterations and write your option agreement accordingly, know what the law allows, use a contract for your lease and a separate contract for your option agreement, use an attorney for your contracts or use contracts previously written by an attorney, treat them like they are buying the house, set your future sales price in the option agreement. That should get you started.

1 Reply
Joel Miller
Member since 2011 · 152 posts · 113 votes
9mo
Ken M. is exactly right. I've done this numerous times. That is precisely how it's done. Don't be afraid to ask for a VERY substantial lease option fee up front... maybe 10% or more of the purchase price. The option fee becomes income in the year they don't exercise their option and either become straight tenants or move out. If they exercise their option, the fee is a credit to them at closing and becomes part of the amount you sold the property for. A very low (maybe around 20% to 25%) actually exercise their options. If they want to buy another option for another term, you can negotiate that, or else they move and you do the same thing with a new tenant/optionee.
0 Reply
Patrick O'SullivanBusiness Member
Property Manager · Phoenix, AZ · Member since 2024 · 559 posts · 213 votes
9mo
Congrats on the property, Sonja. Lease options can work really well, but they do take some careful planning.

Screen tenants like buyers. Check income, credit, and job stability. Ask for a solid option fee upfront to make sure they are serious. Keep the lease and the option agreement separate and clearly outline the purchase price and terms. Decide ahead of time if they can make changes to the property.

Legal review is important, and for marketing, be clear in your listing that it is a lease with a future purchase option. Overall, focus on protecting yourself while attracting tenants who have the means and motivation to buy. With good screening and clear agreements, this can work very well.
[email protected]480-795-7938
get MULTIfamily Property Management4.7215 Reviews
Website View Page
1 Reply
- Sonja Revells
  OP
  Investor · Destin, FL · Member since 2024 · 40 posts · 15 votes
  8mo
  THANK YOU PATRICK!! :)
  
  Quote from @Patrick O'Sullivan:
  
  Congrats on the property, Sonja. Lease options can work really well, but they do take some careful planning.
  
  Screen tenants like buyers. Check income, credit, and job stability. Ask for a solid option fee upfront to make sure they are serious. Keep the lease and the option agreement separate and clearly outline the purchase price and terms. Decide ahead of time if they can make changes to the property.
  
  Legal review is important, and for marketing, be clear in your listing that it is a lease with a future purchase option. Overall, focus on protecting yourself while attracting tenants who have the means and motivation to buy. With good screening and clear agreements, this can work very well.
  
  1 Reply
- Patrick O'SullivanBusiness Member
  Property Manager · Phoenix, AZ · Member since 2024 · 559 posts · 213 votes
  8mo
  Quote from @Sonja Revells:
  
  THANK YOU PATRICK!! :)
  
  Quote from @Patrick O'Sullivan:
  
  Congrats on the property, Sonja. Lease options can work really well, but they do take some careful planning.
  
  Screen tenants like buyers. Check income, credit, and job stability. Ask for a solid option fee upfront to make sure they are serious. Keep the lease and the option agreement separate and clearly outline the purchase price and terms. Decide ahead of time if they can make changes to the property.
  
  Legal review is important, and for marketing, be clear in your listing that it is a lease with a future purchase option. Overall, focus on protecting yourself while attracting tenants who have the means and motivation to buy. With good screening and clear agreements, this can work very well.
  
  Glad to help!
  [email protected]480-795-7938
  get MULTIfamily Property Management4.7215 Reviews
  Website View Page
  0 Reply
Marc Winter
Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 3k+ votes
8mo
@Sonja Revells, one critical issue with lease/option or 'rent-to-own': the LEASE must not mention the option, and the OPTION must not mention the lease.
Why? By referencing each other, an equity position benefitting the tenant/buyer is created, which may preclude a simple eviction when things go sideways. Then an ejectment, which is similar to a foreclosure, may be necessary. Ejectments are much more expensive in time, money, and lost revenue.
Lastly, because there are more moving parts involved, let an attorney prepare the option and future contract of sale. That will provide a bit more protection for you in the event of litigation.

1 Reply
Sonja Revells
OP
Investor · Destin, FL · Member since 2024 · 40 posts · 15 votes
8mo
@Marc Winter Thank you, I appreciate your input. :)

0 Reply
Michael Wyatt
Lender · Boston, MA · Member since 2021 · 125 posts · 64 votes
8mo
General question - how does one go about finding this as a tenant/buyer? Are these typically listed on the MLS as for sale or for rent or both?
0 Reply
Jim Johnson
Real Estate Agent · Memphis · Member since 2026 · 624 posts · 359 votes
8mo
Good move thinking this through before jumping in. Lease-options can work, but they need to be structured carefully — especially in Florida.

A few things to be aware of:

First, a lease-option isn’t just a “regular lease with a handshake.” It’s two agreements — a lease and a separate option contract. The option should clearly spell out:
- option fee (usually non-refundable)
- purchase price or how it will be determined
- timeline to exercise
- how rent credits (if any) work
- who handles maintenance during the lease term
Second, screen like it’s a sale, not just a rental. You’re ideally looking for someone:
- who can’t qualify today but is close
- with stable income and improving credit
- who’s working toward financing within 12–24 months
If they’re not realistically mortgage-ready in a year, it often turns into a regular rental with disappointment attached.

Third, understand the risk. In many cases, tenants don’t end up exercising the option. Make sure the deal works for you even if they walk away and you simply keep the option fee.

As for finding candidates, many investors market it as "rent-to-own" on MLS, Zillow, Facebook Marketplace, and local investor groups — but be prepared to pre-screen heavily. You'll get a lot of inquiries from people who aren't financially ready.

Before drafting anything, it’s worth having a Florida real estate attorney structure the documents correctly. Lease-options can unintentionally create legal complications if not written properly.

If structured well, they can help move a slow flip. If structured loosely, they can create bigger headaches than a normal rental.
...and Congratulations!
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