Use Lease Option To Make Money In Real Estate:
The lease option has become one of the featured strategies for real estate wealth
building because it has legitimate win/win features for both the buyer and the seller. We will talk about lease options extensively in Chapter 16. For now, though, you should recognize that the lease option is an excellent way to buy property if you don't have much money to put up for a real estate purchase.
Using the lease-option strategy, you find a property that you are interested in, and you offer to lease it for a certain number of years with the right to buy it at any time during the period of the lease for a set price,
normally more than the property is worth at the time of the agreement. You lease the property and hope that it will appreciate faster than your set purchase price. If it does, you exercise your option and sell the property, making the profit. If it doesn't, you let your lease expire and try again somewhere else.
This can be a very successful technique for getting ownership of a property at a good price. You might think it would be
difficult to get people to offer a lease option on their property, but in fact, there are many circumstances under which people will do so happily, even in hot markets. In Orlando, Florida
- one of the hottest real estate markets in the country, for instance, we recently structured a type of option transaction on a commercial building worth more than $12 million, and the property has already appreciated
by 25 percent or more. Will we make 25 percent on our money? Who knows? If we time it right, we'll do fine. If we don't time it right and things get
overbuilt and commercial rents and prices decline, then we won't make any money. Ah, but that is the joy of real estate investing!
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