It's with the exercise.

But it sounds like this isn't a note, so that doesn't apply.The lease option tenant is screwed if they have been paying their rent on time and want to exercise their option.  

The purchase option agreement can have a deposit (5%-20% of purchase price) to be made by the tenant/buyers, a portion of which will not be refunded in the event they do not exercise their option.  

There are a lot of lonely people that work crappy jobs and they want to exercise some dominance over someone or something they think they might have control over.  

Im not against options, just be careful, the reality is very few people exercise their option, like 2-5% (they just cant clean up their credit and save) and tend to forfeit their option money, even though you have a contract, do this a few times, and you will build a reputation, and not a good one even though what you are doing is legal, and everyone consented you will still be considered the bad guy for taking their option money.

Super fun exercise...

Real estate IMO should enhance your quality of life, if you have a life there.. why leave??  

Make it about $200 more if market rent is a $1000 or $1100) The option should be exercised within 1-2 years.

It’s a great way to learn more while doing other things such as exercising, driving, etc.Get involved with a local REIA groups.

When the tenant buyer exercises the Option to buy a few years later, generally that has bought down our underlying financing and we split those profits 50/50 as well.