Real Estate Investing – Is A Lease Option A Good Idea When You Really Want to Sell?
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Lease with option to buy: a lease option has a longer term than a straight option, usually running for as long as one year or longer. Some will even stretch to three years, depending on the whim of the seller. While your lease is ongoing, you can rent out the property and be in a positive cash flow. The second advantage is, the property is appreciating in value. If you have a long lease option, you can then sell the property for the highest price you can obtain.
One last strategy for hot picks: be on the alert for long leases. Long leases will ensure that a property will be rented or leased for long periods of time, not just a year. Some commercial leases for example go for as long as 5 or 10 years. One example is the government. Take post offices as the best illustration. The government will usually rent space for post offices on a long term basis. If the property you are eyeing has government outlets like the post office, the automobile insurance board or the government-sponsored health centres, these buildings qualify as hot property! LOCATION!
You’ve heard about the three principal parameters in real estate? One – location, two – location, and three – location. Take that with a capital “L”. One trick in looking for that pot of gold at the end of the rainbow is to buy the worst property in the best neighborhood, NOT the best property in the worst neighborhood. This is a cardinal rule that sophisticated inventors try never to break.
If you are thinking about offering a lease option, check out: Insider’s Guide to Selling Real Estate
