Lease Option (Lease With Option)

Lease with option is basically a modified rental agreement. It includes an "option" to buy at the end of the lease term. Lease option is a common seller financing method.

Sellers can make alot of money with lease optioning their properties. This is because not only does the lessee pay a monthly rent but they pay extra monthly which goes toward the equity in purchasing the property. If the lessee were to fail to exercise their option, the seller would be able to lease option it out to someone else and keep all the profits he made.

Another term you will see is sub-lease with option. Sometimes you will buy using a lease option method and below market rate. If this is the case you as the buyer can make money sub-leasing with option.

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