Lease Option

[Michael Swogger]

Hello,

I bought my first home in October of 2014. I've decided I don't want to live there anymore and I've always wanted to be a landlord. So I was going to lease it out but then I heard about lease options. 

Lease options sound almost too good to be true to me so I'm wondering if I'm missing some partial element. I like the idea of money option that is nonrefundable. That makes me feel safe in the event that I have to evict the tenant. I like knowing that after the lease is up, the tenant may buy it, which is good for me, and if they don't buy it, I get to keep the option money so I still win? I understand if the house appreciates a lot during the time, then I may lose out on profits but I still don't see what's so bad about going this route.

Thanks, Mike

[Shawn Holsapple]

Welcome @Michael Swogger!

One the main elements with a lease option [like ALL business opportunities] is rock solid contract.  DO NOT download from rocketlawyer or something off the web for free or $50.

You will need to have a local, REI friendly, attorney draw one up for you. This should cost under $300.

Next, like all rentals, you will want to be sure to screen the prospective tenant/buyer thoroughly.  I use NTN.  Like the contract, don't skimp.  Pay for the full back ground check [it's only $35 vs. $17].

Get as much option money as you can.  This can vary from a few hundred to several thousand.

You're on right track, now get some education and start pushing forward!  

- it's always good to see another Hoosier utilizing this great site!

Of course, you need to read The Ultimate Beginners Guide to REI here on BP

If you haven’t already, please read/listen to these books ASAP!

Flip2freedom episode 77[http://www.flip2freedom.com/a-3-step-formula-to-a-successful-balanced-and-insanely-profitable-2012/] - podcast - LISTEN TO THIS TODAY!

Rich Dad Poor Dad

Rich Dads Cash Flow Quadrant

Rich Dads Increase your financial IQ

The Real Book of Real Estate

The ABC’s of RE Investing

The ABC’s of PM

Rich Dad RE Tax Advantages

The 10X Rule

The E-Myth

The 4 Hour Work Week

BiggerPocketsPodCast

Wholesaling101 You Tube Channel

Kent Clothier – You Tube Memphs Invest channel