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Have you ever dreamed about being able to help those that are less fortunate? Have you ever had dreams of making huge sums of money in the real estate market? If you answered yes to both of these questions, chances are you’d be a great candidate for doing the type of real estate investment that allows you to purchase a condo and lease it while allowing the tenants to buy at the same time. A lease to own agreement is perfect for people who, for whatever reason, are unable to gain traditional financing to purchase a home.
This is one of those rare business opportunities where you can do as much for your profits as you can for humanity. The lease to own option is actually a winning situation for all parties involved. Think about it, a renter would normally have no ownership in a condo because it belongs 100% to the landlord. This is one of the reasons that a regular renter as tenant will usually give you someone living in your condo that has no pride in taking care it. Most of the time when these renters leave a condo the repairs cost more than what was set aside as their security deposit. If a person has the possibility of one day owning the home they currently live in, usually they’ll take more pride in the upkeep of that home. Having a home that is properly maintained has a direct correlation to the increase in that condo’s value – this will help you even if your tenant does not end up purchasing in the end.
The other benefit to the real estate investor is that these properties tend to be in higher demand and therefore are easier fill should the sale fall through and you end with a vacancy. There is always the chance that plans could change and a tenant could get a work transfer, divorce, or suddenly become unable to pay; should this happen it is important to set yourself up so that should a vacancy occur, your condo won’t sit empty for long.
The benefits of purchasing a condo with the intent to lease to own offers many other benefits as well. First, a predetermined sum of money will be put aside on a monthly basis. This money will be put into an escrow account to be saved and used for a down payment. It allows the tenant to put away money toward the purchase of a new home without consciously thinking about what they’re doing. In these specific types of agreements those living inside the condo have a bit more leeway when it comes to things like painting, making repairs, and decorating overall than they’d have in a home they were just renting.
Another huge benefit to having a lease to own contract is that the tenants have a specified amount of time (usually 2 years) to get their situation cleaned up to the point where they can actually make the move towards home ownership when the time comes. Typically these types of tenants will have credit issues that need to be dealt with as well as monies that must be saved. And while they are doing all of this, they will have the benefit of trying on the house for size. Who wouldn’t want to live in a home for a trial run that lasts for two years? The owner gets the benefit of receiving monthly payment on the condo.
The lease to own option is one that many wish was offered much more often. Not only is it a big help to those who are going through a rough patch financially, it is also an option that can be very lucrative for the real estate investor who chooses to go this route.
