Lease option vs land contract

[Tyler Speelman]

Hello, Off market single family rental for sale in Ohio. Current resident wants to purchase house, but can’t qualify for loan. Asking price $139,900 Monthly rent $800 I told the seller I could purchase it if current resident would agree to rent to own agreement or land contract. Would you do land contract or lease option? How would you structure to make this a good deal? Thanks in advance for any guidance.

[Scott Anderson]

You aren’t the bank if in a lease option. You’re a landlord.

Lease option charges more rent, they can be responsible for repairs (if legal in your area) up to a pre agreed to amount or in general. And the option purchase is not a down payment. It’s the cost of the option contract.

I would buy it at a steep discount or finance it, sell an option to buy at $5000 to purchase in the next two years at $150,000. And charge $1000 per month for the lease and they pay you back for all repairs Made by you not them under $200.