How to Find Lease Options

In today's real estate market it has become more and more difficult to safely purchase a home. Foreclosures are everywhere and lenders have become increasingly tight with their money. If you aren't 100% sure about your financial situation, or simply would like to "test-drive" a house, perhaps a lease option is right for you. A lease option allows you to rent a home for a designated amount of time, usually 1 or 2 years. Then, after the time has expired, you have the option of purchasing that home at a predetermined price. Sometimes lease options apply a portion of your rent payment towards the purchase price. If you want some ideas on where to find lease options, look no further.

Instructions

1. Search the real estate rental ads. Typically you will find a few rentals listed as lease options.

2. Call a Realtor. Realtors get a commission on sales, no matter how far down the road they may be. Most Realtors have connections to real estate investors who might have lease options available.

3. Talk to your existing landlord. If you currently rent, your present landlord may be the perfect candidate for a lease option. It is a great opportunity for him/her to get out of the rental business and sell to a trustworthy individual.

4. Drive around town looking for "For Sale By Owner" signs. Many of these homes are vacant and need to sell immediately. Desperate sellers quickly consider lease options because they get incoming rental income and the option of selling their home down the line.

5. Network with friends and coworkers to see if someone might be looking to get into the rental business. Lease optioning is a great way for a beginning renter to break into real estate. There is less risk of sitting on a home that won't sell and renters treat the property better because they might own it someday.

Tips & Warnings

• Usually a down payment is given to the seller in the case of a lease option. Typically, however, this is much less than a down payment to a mortgage company.

• Lease options are slightly dangerous in a falling real estate market. If you fall in love with a house that suddenly depreciates in value, you are stuck with the higher price down the road or you walk away.