How much to pay for a lease option?
- Thread starter CoryHelm
- Start date
- Joined
- Oct 24, 2007
- Messages
- 2,289
Four elements to a good lease option deal
1. Deposit amount (almost always non refundable)
2. Final purchase price (always a bit higher than market)
3. Rent rate (variable.. but usually higher)
4. Rent credit back to down payment (variable)
if I am buying using a lease option I try and get it at todays price (full market) and tie it up for as long as I can. If you are selling the lease option you can`t make it too much higher than full market anyway because whoever is buying it is eventually going to have to get financed and the bank`s appraisal has to be in line with your selling price.
That`s if you want to get cashed out. You could take a note for the difference in purchase price that the bank will fund and your premium.
If you or the other half wants a different purchase price then you have three other terms you can negotiate to try and get a deal done. Y
QUOTE (CoryHelm @ Apr 15 2008, 01:40 AM) I was wondering how much over market you should pay for a lease option. The property is in Penbrooke so it is a bit rough. It just cash flows right now with room to increase rents $500 month. Any ideas
1. Deposit amount (almost always non refundable)
2. Final purchase price (always a bit higher than market)
3. Rent rate (variable.. but usually higher)
4. Rent credit back to down payment (variable)
if I am buying using a lease option I try and get it at todays price (full market) and tie it up for as long as I can. If you are selling the lease option you can`t make it too much higher than full market anyway because whoever is buying it is eventually going to have to get financed and the bank`s appraisal has to be in line with your selling price.
That`s if you want to get cashed out. You could take a note for the difference in purchase price that the bank will fund and your premium.
If you or the other half wants a different purchase price then you have three other terms you can negotiate to try and get a deal done. Y
QUOTE (CoryHelm @ Apr 15 2008, 01:40 AM) I was wondering how much over market you should pay for a lease option. The property is in Penbrooke so it is a bit rough. It just cash flows right now with room to increase rents $500 month. Any ideas