f you have an investment them, and create incentives for
property, should you rent them to eventually buy your
it or sell it? The answer property. Including the option to
to that question is that you purchase to the least contract
should do both. If you have lots can eliminate most of the
of time on your hands and are headaches associated with
handy with tools, you can choose maintenance and dealing with bad
to rent out your property. tenants. There are several other
However, if you have several benefits to the lease and
properties for rent, maintaining purchase option.
them can consume lots of your
time. You can choose to hire Because the rent is usually
someone else to maintain your higher when you include an option
properties, but it cost you to purchase, this can eliminate
money. And higher expenses mean most tenants only wanting to
lower profits. In addition to rent. People looking for the
investing your time, finding good lease and purchase option are
tenants for your properties is those usually in the process of
not easy. Tenants that choose to rebuilding their credit, or are
rent usually do it for a reason. saving money for their down
They are usually having credit payment. To be fair, the duration
problems. In addition, most of the contract should be between
tenants do not take good care of 2 to 3 years, long enough for
your properties like they would your tenants to rebuild their
their own homes. And when things credit.
go sour, they can mess up your
house before they move out. Your This contract also transfers the
goal is to find good tenants to maintenance responsibility to
rent your property, transfer the your tenants. Not having to worry
maintenance responsibility to about maintaining the property
frees up your time for you to during the contract, you must
continue to expand your business. return to option fee to your
Giving your tenants the option to tenants. Either way, you are
purchase your property create an making money whether your tenants
incentive for them to take better buy the home or not. If your
care of your property. You may tenants decide not to purchase
also choose to apply some of your property and the contract
their rents toward the down expires, you can begin the entire
payment if they decide to buy process all over again.
your property. This is another
incentive for them to pay the The important points about the
rent on time, and eventually buy lease and purchase option are
your property at the locked in that you are looking for good
price. tenants to rent your property,
create a constant cash flow from
During the contract, you cannot the rent, transferring the
sell the house to anyone else maintenance responsibility to
other than your tenants. However, your tenants, which frees up lots
you charge your tenants a fee of your time, and eventually sale
(usually 1 to 2 percent of the the property. Your ultimate goal
purchase price) for the option to is to sell the property to good
lock in the price of your tenants at a price that is fair.
property. If your tenants do not The deal should be fair enough
purchase the property before the that both parties come out
purchase option contract expires, feeling like winners. This is
you get to keep the option fee. important if you want to be in
However, if your tenants utilize this business for a long time.
the option to purchase anytime
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