Lease Options (Rent To Own) Hot REI Strategy

Lease options is the "hottest" REI strategy today in light of the very soft real estate market.  There is a abundance of houses for sale in every price range, in every area of any town and there are millions of buyers wanting to buy these houses.  However with the "pendulum" of home mortgages swung in the other direction, qualifying for a traditional home mortgage is difficult.

 

In the "infinite" wisdom of our "leaders" you must have more than a pulse to get a loan these days.  You must actually have an income, good credit history and track record worthy of taking on hundreds of thousands of $'s in debt.  Therefore these higher credit scores and higher down payments make the dream of buying a home is just that a "dream".

 

That's where using a lease option to buy a home fills this need.  A lease option requires considerably less down payment, usually 3 - 5% of the selling price as compared to 10 - 20% for a traditional mortgage and time to work on credit issues, usually 6 months to 3 years.   Both of these components of a lease option give the buyer, called a tenant buyer in lease options, the ability to buy their own home albiet, they are actually leasing the home for a period of time and then closing when they qualify for a mortgage.

 

However the biggest advantage is that the tenant buyer is actually on track to buy the house they want instead of "throwing all their monthly rent away" with nothing in return.  A lease option applies all the downpayment to the selling price of the house at closing and usually a part of the monthy lease payment, called rent credits, can also be applied at closing.

 

In summary, the lease option is a very viable way to buy a house in today's challenging real estate marketplace and will be for the foreseeable future until "santity" returns to the "powers that be"!

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