Pros and Cons of a Lease-Purchase For Sellers
Just as a lease-purchase has pros and cons for home buyers. Generally speaking, this is a good deal for the property owner. But take a look and decide for yourself.
Pros of lease-purchase include:
-High demand: Especially with the current housing situation, rentals are in high demand. And there are plenty of affluent would-be buyers whose credit is simply in disrepair at the current time. The flexibility and “no bank involvement” that lease options offer is always appealing, but especially right now. So there’s plenty of consumer demand and those consumers have no negotiating power on the monthly cost.
-More profitable: Because tenants are putting extra money above monthly rent toward a downpayment on the house, property owners can come out well ahead profit-wise.
-Quality tenants: Because these tenants are putting extra money each month toward owning the home, they have already developed a sense of pride in ownership. Their sense of attachment to the property will encourage them to take care of it.
The cons of lease-purchase include:
-Price lockdown: The home price is negotiated and put in writing on the front end of the deal, so if anything occurs in the area to cause property value to skyrocket, it’s too late. If the tenants want to follow through and purchase the home at the originally agreed upon price, the property owner has to abide by the terms of the contract.
-Deals fall through: Many lease option renters underestimate their ability to buy a home in a year, two years or five years. They simply will not be able to make it happen. Sometimes, living in the home will uncover features that they don’t like. Maybe the neighbors are too loud, and the tenants decide they will not purchase the home after all.
January 18th, 2008 at 10:37 am
[…] and Cons of a Lease-Purchase For Sellers realestate.guide@about.com wrote an interesting post today onHere’s a quick excerptJust as a lease-purchase has pros and […]
January 18th, 2008 at 11:02 am
[…] Kathy T. wrote an interesting post today onHere’s a quick excerptJust as a lease-purchase has pros and cons for home buyers. Generally speaking, this is a good deal for the property owner. But take a look and decide for yourself. Pros of lease-purchase include: -High demand: Especially with the … […]
January 18th, 2008 at 11:08 am
[…] Kathy T. wrote an interesting post today onHere’s a quick excerpt […]