Summary of Lease with an Option to Buy
Summary:
A Lease with an Option to Buy gives the renter the opportunity to buy a house at a future
date at an agreed upon fixed price with a small initial down payment. For example, let’s say we
were offering to sell a house at a current price of $184,900 or with an Option to Purchase at a
future date with $4,500 down (“Option Consideration”). At the end of a 24-month lease, the
tenant will have the opportunity to buy the house at $184,900 less the $4,500 down. In addition,
we would allow $200 of each monthly rent payment to go towards the purchase price as well.
Therefore, at the end of the 24-month lease, the tenant will have accumulated approximately 5%
down ($9,300) on the property.
For Example:
Price of House : $184,900
If property is purchased at the end of the lease.
Price = $184,900
Less: Option Price = $4,500
Less: Rent Credit = $4,800
Price Owed to us = $175,600
Provided the tenant has a good credit rating, they should would be able to go to a bank and get a
loan for the $175,600.
Key Advantages:
1. Lease options work well for people who need a little time to repair some minor credit
problems or just want to wait to make a purchase. Assuming the tenant makes timely
payments, the history with the Landlord will be an excellent credit reference with the
future mortgage company.
2. Works well for people who need or want to live in a beautiful home immediately even
though they are not is a position to buy at this time.
3. Since the purchase price of the house remains fixed during the lease term, the tenants may
be able to purchase the property at a price lower than it is worth.
4. Allows the tenant to “try out” the property before they buy with a smaller amount of
money at risk than would be if they purchased it out right.
Important Items to Understand;
1. The Option Consideration ($4,500) and all rents paid are non-refundable. If you don’t
buy the house, you are not entitled to any refunds. If you are evicted because of a lease
violation, all monies paid are forfeited.
2. The property is being sold to you in “As Is” condition. Even though we have made every
effort to give you a property in good condition, we do not warrant the property.
3. Most routine maintenance and repairs required on the property are the tenant’s
responsibility. The lease rate we charge you does not allow us to take on normal routine
maintenance and repairs.
This sheet is for informational purposes only. The actual terms and conditions of any agreement
will be made in writing by executing a Rental Agreement, Option Agreement and any related
addendums. We reserve the right to modify any terms stated above at our sole discreation.