So how does it work? A lease option agreement involves a tenant being given the option to buy a property at an agreed price at the end of a given rental period, usually three to six years. The renter-buyer pays a consideration up front, but at 2-3% of the market value of the property this is preferable to putting up a full deposit of 5-20% straight away.
Many young couples for example, would need to spend many years putting together a deposit the conventional route, bit of money from bank of Mum and Dad, savings, brown bag lunches, etc. With a lease option, it is possible to take a position on a property, while builiding the ability to pay a lump sum down the road, often also, within the agreement, a credit can be added to the monthly amount paid, often more than a conventional rent, toward the final purchase price deposit or down payment.
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