In my opinion It's not ideal for rental.. at least here in the US (I noticed you are in Canada... not sure how it works there)Here you have to pay property taxes and insurance... you obviously need to pay for maintenance as well as property management (even if you manage yourself consider that your time = money)... you also need to take into consideration initial vacancy and the fact that sometimes it take couple of tenant's before you get a good one that stays very long termHere once I take all my costs out I tend to make approx 30% of my rent in the first year50% in year two and three 60% afterwards If rent is $1200, it would me bring net $400 avg first 12 months ($4800 first year), $600/mo second year, $700/mo afterwards... probably a hair more if I include a rent increaseYour interest payment after the first year is going to be approx $700/mo... which means you are barely making it.

All of my Optionor (TB) LOs have costed me about 1% of strike in consideration.  

Thanks for your consideration.

@Daniel Odess makes some very valid points that you need to take into consideration.

Theoretically, rising interest rates will slow down housing sales and potentially bring down prices a bit.

The option fee is is just a payment as consideration for the Option to purchase. 

Or also another consideration was a buyer not taking a commission, making that $88k a higher net price than 97% of $90k which would be $87,300 net.

.* Tenants pay a NON-Refundable Option Consideration Fee in order to receive that option.

Taxes are another loss that needs to be taken into consideration. 

should this earnest money in this case be solely my fee or should it include other considerations?