Are You Going Out Of Your Mind Trying To Keep Up With Collecting Rent, Calls For Repair, etc???
Try Doing A Lease Option.
Frequently Asked Questions About Lease/Options –
(NOTE: This section is for existing Landlords/Investors seeking a non-exclusive listing agreement. If you are a Buyer/Tenant looking to purchase a home from an investor through our lease/option program, please visit our website at www.LVLeaseOptions.com for current Available Lease Option Home listings and information.)
- How does a lease/option work?
A buyer/tenant will pay a premium to purchase your home later. The money they put down aka OPTION FEE and a RENT CREDIT is converted to a down payment at the end of the lease. Purchase agreements come in 2 flavors:
This is the average of similar properties determined by a licensed real estate appraiser at the end of the lease.The benefit with this method is that the property will be purchased at a fair value. The disadvantage of course is that the property could dramatically decrease. An alternative method is to have the buyer and seller select an appraiser and pick the average of the two.
A price agreed by you and my buyer/tenant. The benefit with this method is that you will have peace of mind as to what the price will be at the end of the lease.
- What are the benefits to a lease/option?
You will probably make more money. Buyer/tenants pay extra money for the right to purchase a home at the end of a lease. During the lease period, they will be fixing their credit and lining up financing. Generally, you will receive about 1% up front and anywhere from a $200 – $500 premium over rent.
- How long is the lease?
Most buyer/tenants want a 2 year lease. However, every case is different.
- What is the downside to a lease/option?
You could lose money if real estate continues to fall. In some cases, if the assignee exercises their option and the contract is for appraised value, you could lose money if the appraisal is less than what you purchased the property for. There is no guaranteed way to make money in real estate. Anyone who can promise you a profit is pulling your leg.
- Is today's estimated value important in a lease/option?
No. Today’s value has nothing to do with a lease/option contract. The only purpose of putting today’s “Estimated Value” is to provide potential buyer/tenants a frame of reference. It is not the price they will purchase your property. Inflating this value works against you so don’t call me and complain about it.
- Can tenants be evicted easily for non-payment?
Yes. Tenants are evicted every month for non-payment. One of the benefits of Nevada is that eviction processes favor land owners. Tenant/buyers are warned in advance that there is no mercy and that they will lose all their money if payments are not made on time.
- What happens if repairs are necessary during the lease?
Tenants are often responsible. Usually there is a 30 day grace period after a tenant moves in. After that 30 days, your tenants are responsible for repairs.
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