When is a Lease-Option on a House Appropriate?

A lease option can be a good solution for buyers who cannot purchase a house right away. Whether it's the market, a tight budget or the need for more time to make a final decision, a lease option can give the buyer a chance to live in the house they want with the option to buy it in the future. The seller also benefits from the lease because they make money during the lease option.

Restricted by Finances

If the buyer is unable to purchase the house right away because of many financial reasons, then pursuing a lease-option is appropriate. Many other buyers may be facing financial constraints as well, especially in a tough economy, which means little or no offers on the property anyway. If that's the case, the landlord benefits from earning rental income on the property at a premium rate. Otherwise, the house could cost the landlord monthly if a mortgage or taxes are owed.

Not a Familiar Location

Even if a buyer can purchase the house right away, it may be wise to wait to make sure. If the buyer is new to the area, then they may want to take the time to make sure that the neighborhood is right for them. A lease option gives them that flexibility to move forward with the purchase, or decline when the option is up.

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