Land Contract vs Lease Option

[Michinori Kaneko]

Hi,

I wanted to make sure I understand the difference between the two because I am considering this avenue on few of my properties.  Here are my understandings of the two:

Land Contract:

Buyer usually pays small down payment.  

The purchase price is set slightly higher than market value

Interest rate on "Loan" is usually higher than bank interest rate

Taxes and Insurance are paid by the buyer.

All repairs/maintenance are paid by the buyer.

If the buyer can't secure a mortgage by the end of the agreement, buyer will forfeit the down payment + any principal repayments.

Your monthly "rent" consists only of PITI.

The Seller cannot take depreciation deduction or interest expense deduction on the property as the property's title is no longer with the seller upon signing the land contract.

Lease Option:

The buyer pays an option fee upfront (how much is this usually?). This does not count towards purchase price.

Purchase price is usually set slightly higher than market value.

The option gives the tenant the option to purchase the property at the end of the agreement. If the option is not exercised, the seller keeps the option fee. 

Purchaser will continue to pay rent, which does not count towards the purchase price (often higher than PITI).

Taxes and Insurance are paid by the seller

Repairs and Maintenance are paid by the seller

Seller keeps the title until the option is exercised, so he gets to claim depreciation/interest expense deductions.

Let me know if any of the above statement is not true.  I listened to one of the pod casts, and the speaker of the pod cast says he does all lease option, and effectively he passes on the Maintenance/Repair expense to the buyer by offering to give them $100 credit from rent per month at the end of the year ($1200 total) if they take care of all the repairs themselves during the year.  if I use this methodology, is there any reason why land contract would be favorable compared to lease option?  Thank you for your help in advance.