Lease Purchase

Lease Purchase
Buy, Don't Rent, When You Can Afford the Down Payment
ADVERTISEMENT

MY COMMENT - CONSIDER: if YOU are ahead by buying and owning, why would you ever as an investor take the position of offering the renter the option to buy? Unless you adjust the amount of the rent and monthly option total to favor you. And adjust the terms of the agreement to your favor also.

After looking at all the costs involved in buying house, you may have begun to have second thoughts: Perhaps, it is better to rent a home.

Real estate in most areas today is not a top investment compared with investment securities. "You're not going to get a 30 percent return on your house," said Steve O'Connor, senior director of residential finance at the Mortgage Bankers Association of America. In the past decade, people have been advised to think of a home "as shelter not investment" O'Connor said. "Wealth accumulation is secondary."

Still, as shelter, most experts say if you can afford the down payment, it makes sense to buy your home rather than rent it. That's because you can deduct mortgage interest on income tax and build equity in your property. This is especially true when mortgage interest rates are low. Mortgage interest rates are deductible up to a $100,000 annual limit.

Example
A homeowner has a gross annual income of $40,000. The monthly mortgage payment is $1,000 on a 30-year mortgage. In the first few years, 80 percent of that payment goes to interest and is therefore tax deductible. In the 15 percent tax bracket, the homeowner saved about $375 more in taxes with the home provision versus with only a standard deduction.

Lease-Purchase Agreements
Some people take a middle road. They ease into homeownership by renting a house or condominium with an option to buy.

Lease-purchase gives a buyer time to save for a down payment or to clean up a credit history.

It can work in a buyer's favor in areas where real estate values are rising quickly at a rate of 10 percent a year. A buyer benefits from this appreciation because the purchase price of the home is locked in on the day the buyer signed the rent-to-own contract with the seller.

In most agreements, the seller allows a portion of the rent to be applied towards the purchase price, which some lenders consider to be part of the down payment. The amount of rent credited could be 10 percent to 100 percent, based on your contract.
Most rent-to-own options require some down payment to secure the agreement, which is not refundable in case the renter decides not to buy.
Homeowners who would agree to a lease-purchase option include people who have had property on the market longer than they wish or owners who had to move and want the house to be lived in. The owner benefits with rental income to help pay the carrying costs of the home, and the strong possibility of selling the house when the contract expires.
=============================================

HomeRun Homes Rent to Own Homes, Rent to Own, Home for Rent ...home, home rentals, house rentals, lease with option to buy, rent to own ... option to buy, lease purchase, lease2buy.com Find rent to own homes, homes ...
www.lease2buy.com/ - 55k - Cached - Similar pages

Lease Purchase, Lease Option, Rent to Own Creative Real Estate ...How to Buy, Sell and Invest in Real Estate Safer and Easier with the revolutionary Lease 2 Purchase (lease option or rent to own) contract ...
www.lease2purchase.com/ - 19k - Cached - Similar pages

How to Do a Lease-Option on a Home - eHow.comseller financing home; owner financing home; what do I do if I can't get a home loan; what is a lease with option to buy; how can I rent to own a home ...
www.ehow.com/how_5453_lease-option-home.html - 33k - Cached - Similar pages

Lease with Purchase OptionThe easy way to give your renters the option to buy. Can be used to lease a condominium or house with the option to buy. If you have rental property that ...
www.socrates.com/real-estate-forms/leases-and-landlording/Lease-with-Purchase-Option.aspx - 47k - Cached - Similar pages

lease options what is a lease option thisI would appreciate knowing how a contract is worded in a "rent with option to buy" situation. Or is there a site I could download such sample forms? ...
www.realestateabc.com/answers/option.htm - 16k - Cached - Similar pages

Lease-OptionsThe higher the rent credit percentage, the greater the probability the tenant will buy. Try Out the Property Before Buying Another special lease-option ...
tms.ecol.net/realestate/leaseopt.htm - 18k - Cached - Similar pages

Information about Rent to Own Homes, Lease Option to Buy Homes ...Information about Rent to Own Homes, Lease Option to Buy Homes, Lease Purchase Homes, Homes for Rent nationwide. Find or List Rent to Own Homes, ...
www.rentalhouses.com/lease_option_homes.php - 107k - Cached - Similar pages

Buy, Don't Rent, When You Can Afford the Down Payment: Mortgage ...Buy, Don't Rent, When You Can Afford the Down Payment ... Homeowners who would agree to a lease-purchase option include people who have had property on the ...
loan.yahoo.com/m/basics11.html - 15k - Cached - Similar pages

Rent to own a home - Lease with option to buy homes, November 9, 2006Renters can buy a home - rent/lease with option to buy.
www.jscinvestments.com/renters.asp - 18k - Cached - Similar pages

Lease Purchase Overview, Lease Option Agreements, Benefits of ...Some of your rental or option money is working for you towards the purchase. ... buyers to realize their dream is to lease a home with an option to buy. ...
www.homerentalads.com/leasepurchases/tenants.htm -