Suppose you own a home and can wait out the term of a lease option to
exit the property, typically from one to three years. Or perhaps you
have a property you’ve had trouble selling. In that case, a lease option
is an excellent sales method that can be pretty lucrative—combining the
benefit of a flip by receiving a hefty option fee at the beginning of
the contract with the benefit of long-term renters.
Of course, tenant screening should always be top-notch with lease
options. First, you’ll want to perform a rigorous review to bring in
highly qualified tenants, staying within all local, state, and federal
guidelines governing tenants. Then, with the right property and the
buyers in place, you could cash in on this advantageous method of
selling real estate. So read on as we discuss how lease options work for
your Belleville house.
Sales Price
Lease options work for your Belleville house because buyers are
willing to pay extra to enjoy the benefits of homeownership while you
allow them time to make sure they like the home, repair credit, or save
towards a downpayment. In addition, because you must estimate the future
market value of the property, you can set the sales price above the
current market value. So while you risk prices soaring far above this
number, you can mitigate taking a hit down the road by cushioning the
sales price now; the buyers, on the other hand, risk home values falling
and owing more for the property than the market value.
Option Fee
A large influx of cash is always a nice bonus, with the fee for the
option typically ranging between two and five percent of the home’s sale
price; this is another way lease options work for your Belleville
house. With the average sales price of homes reaching an all-time high
of $400,000 in May of 2022, you could collect up to $20,000 for the
exclusive right to buy the home by exercising the option. In addition,
the option fee is typically nonrefundable.
Rent Premium
Increased monthly cash flow is another way lease options work for
your Belleville house in the higher rental rates you can charge, with a
portion of the rent payment to apply towards the down. The rental
premium amount must be above the market average for many lenders to
consider it for the downpayment, so be sure to check with mortgage
lenders about the terms.
Eliminate Holding Costs
Essentially, lease options work for your Belleville house by delaying
the sale while your tenant covers your mortgage payments and utility
costs that you would have paid monthly to hold the property. In
addition, depending on the agreement, the tenants are also responsible
for maintaining and repairing the property as if it were their own home.
However, some contracts have shared responsibility for more significant
repairs exceeding a specific amount, such as $500.
The local professional home buyers at Cardinal Creek Properties
understand how lease options can work to your benefit for your
Belleville house. Our full-service in-house network of professionals can
help you handle everything, from locating the perfect property to
selling through a lease option to property management and everything in
between. At Cardinal Creek Properties, we have the connections and the
team to do the job. Let us help you earn the highest possible returns on
your real estate investments because we win at Cardinal Creek
Properties when our investors win. Let the seasoned professional home
buyers at Cardinal Creek Properties help you. And don’t forget to ask
about our current inventory of the best lease option properties
available in Belleville. Call Cardinal Creek Properties at (314) 467-8137.
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