HAVING YOUR CAKE AND EATING IT TOO!
FOR A FEW MONTHS NOW WE HAVE BEEN JUMPING AROUND THE TOPIC OF LEASE/OPTIONS BUT SOMETHING ELSE ALWAYS COMES UP! BEFORE GOING INTO SPECIFICS IT IS PROBABLY IMPORTANT TO UNDERSTAND WHY PEOPLE DO LEASE/OPTIONS OR IF YOU PREFER RENT TO OWN. A ROSE BY ANY OTHER NAME, ETC. THEY ARE BASICALLY THE SAME THING. IN MOST RELATIONSHIPS (READ MARRIAGE/LONG TERM/WHATEVER YOU WANT THAT MAKES THE PARAGRAPH FLOW FOR YOU) EVEN FAMILIES, BECAUSE IF YOU HAVE MORE THAN TWO PEOPLE THERE WILL ALWAYS BE DIFFERENCES OF OPINIONS AND THAT IS WHAT WE ARE DISCUSSING HERE; ONE PERSON WANTS THE STABILITY OF HOME OWNERSHIP AND THE OTHER PERSON DOES NOT WANT THE RESPONSIBILITY OF HOME OWNERSHIP--A MORTGAGE????? GOD NO PAYMENTS FOR 15-30 YEARS???? (THEY SEEM TO FORGET THAT RENT IS FOREVER!!!) AT LEAST THE MORTGAGE STOPS AT SOME POINT AND THE HOUSE IS PAID FOR AND THEIRS! REMEMBER THOSE OLD FASHIONED MORTGAGE BURNING PARTIES! THIS IS THE PSYCHOLOGICAL REASON FOR LEASE/OPTION/RENT/TO OWN TRANSACTIONS. OLD FASHION COMPROMISE.
FROM A FINANCIAL PERSPECTIVE IT IS BETTER THAN JUST RENTING BECAUSE THE COUPLE HAS MADE A SUBSTANTIAL DEPOSIT ON THE PROPERTY AND THEY ARE MAKING PAYMENTS OVER THE RENT EACH MONTH TOWARDS THE CLOSING COSTS (OR DOWN PAYMENT) HOWEVER IT IS TO BE CREDITED AND YOU CAN EXPECT THAT THEY WILL BUY THE HOUSE. THEY ALSO HAVE MADE A COMMITMENT TO TAKE CARE OF THE MAINTENANCE OF THE PROPERTY AS IF IT WAS THEIR OWN. THEY DO OWN AN EQUITY POSITION IN THE PROPERTY; SO IN ESSENCE, IT IS SOMETHING THEY OWN PRESUMING THEY DO GO TO CLOSING. IF THEY DO NOT CLOSE ON THE PROPERTY, THEN YOU WILL KEEP THE DEPOSIT AND ALL THE MONEY THEY HAVE PAID YOU EACH MONTH. IF YOU HAVE SET UP THE PAPERWORK CORRECTLY; IT WILL BE A SIMPLE PROCEDURE TO GET THEM OUT WHEN THE TIME COMES.
MOST PEOPLE BUYING PROPERTY ON A LEASE OPTION WILL PAY APPROXIMATELY 8% MORE THAN MARKET VALUE; THAN IF THEY BOUGHT THE PROPERTY WITH CONVENTIONAL FINANCING BECAUSE YOU AS THE OWNER ARE IN ESSENCE HOLDING FINANCING FOR THEM.
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NEXT WEEK WHAT HAPPENS WHEN THE OPTION IS EXERCISED