Using Options

[rabrol]

I was reading a few days ago of purchasing by using options.
i.e. arranging to rent a place at higher than market value for 3 years with an option of purchasing at a fixed price within the 3 yr period. Is that something that happens much here in Canada?

Do many landlords / vendors go for that kind of a deal?

Thanks,
Rob

 

[joeiannuzzi]

Hi Rob. I have never heard of that particular strategy in the Calgary marketplace. This is not to say that it does not happen.

I do not write offers to purchase but write options as you mention. That is, the vendor has the right but not the obligation to accept the offer within a certain period of time (I like to give 30 minutes in a hot market). Otherwise, the offer expires and a new offer can be written.

 

[RedlineBrett]

Hi Rob,

These are typically called `Lease Options`. I have two of these on the go right now.

The name of the game is to rent for rate A and deposit B and then find someone to come in behind you for rate C and deposit D.

Obviously you want C and D to be bigger than A and B. and you are `sandwiched` in between.

Great way to get into a property for nothing down and get basically an infinite return but it is not easy to find these deals and make them work. The legals and contracts are also quite tricky.

QUOTE (rabrol @ Apr 4 2008, 01:10 PM) I was reading a few days ago of purchasing by using options.
i.e. arranging to rent a place at higher than market value for 3 years with an option of purchasing at a fixed price within the 3 yr period. Is that something that happens much here in Canada?

Do many landlords / vendors go for that kind of a deal?

Thanks,
Rob

 

[SamEfford]

This is a good option for someone with poor credit and no downpayment to get into a property that they can own in a few years once they have restored their credit and saved some money.