You might never of heard of them…LEASE OPTIONS

So what’s a Lease Option? I’d never heard of them until a couple of years ago… A lease option is essentially a financial contract...

So what’s a Lease Option? I’d never heard of them until a couple of years ago…

A lease option is essentially a financial contract which gives you control of a property without actually buying it.

Yes that’s correct, it allows you to effectively control a property, let it and sell it without the need to get a mortgage or find the deposit.

We’ve done lots of lease options with investors where landlords have wanted to divest their properties but don’t have the sufficient equity to sell them. So they’re happy to agree the cost of the option (the amount they want to allow the investor to take control), the option price (the price the investor can sell the property at and make a profit) and the option period (the length of time the option is granted for).

It gives you the right but not the obligation to purchase a property – so if you sell a property for £100,000 and the option price is £80,000 – it means you make the difference in profit of £20,000.

Also the option will stipulate the amount you need to pay the owner of the property each month – so if this is £200 per month and you rent the property for £500 per month you will make £300 profit (before insurance and other costs).

This all might sound a little complicated so I’ve attached a guide below which might be of interest.

GUIDE