If they exercise the option, then they secure financing and buy the property from you.

I spend a good deal of time managing my business but I learn new things all the time, and get some good exercise when I swing my hammer.

Better terms, rate, etc.I just completed this exercise with a new purchase client!

There does seem to be a "gentle" argument about the efficacy of using cap rates. 

One of these days, a renter will exercise the purchase option, the mortgage will be paid off.

Any RE agent advising to you that this is an option that you should exercise in order to better afford a home should have their RE license revoked for violating their fiduciary responsibility to you as a client.

Proximity to shopping, coffee houses and exercise options are considerations, too.  

BTW, I generally don't do this part of the exercise since I have an attorney firm handle it (along with interfacing with the trustee... which sometimes can be a pain if you are not an attorney;) You will need to pay the sheriff for service ($30/person) and the cost of the writ ($25).

For this exercise lets choose Bakersfield.

All rights, powers, options or remedies afforded to Buyer either hereunder or by law shall be cumulative and not alternative and the exercise of one right, power, option or remedy shall not bar other rights, powers, options or remedies allowed herein or by law.