Real estate investors across the country are turning to lease options in order to sell properties. It can bring in more cash in the long run and will give you the power and flexibility to focus on other investments in the meantime. In our latest post, we explain why real estate investor should consider lease options in Chicago!
As a real estate investor, you may have a property you want to sell but haven’t been able to unload at the price you want. It happens all the time but you don’t need to take a loss. By utilizing a lease option, you will be able to get the price you want, bring in extra income, without any risk. Keep reading to learn more about how lease options can benefit you!
Sell For The Price You Want
When you list a property in Chicago, there are no guarantees that you will get your asking price. You may find your property sits on the MLS stagnantly, forcing you to drop the price. By utilizing a rent to own, or lease agreement with a potential buyer, you will be able to receive the price you want. You will set your sale price in the beginning, letting the tenant know what they should expect. While they might try to negotiate the price, they don’t have much bargaining power, so what you ask for, you will likely get. The only thing to be aware of is any major market fluctuations while the agreement is in place. Even if prices rise dramatically, you will still need to sell them the home at the originally agreed upon price. On the flip side, if the market drops, you will still be able to get today’s price for it.
Generate More Income
Each month the tenant will pay you a higher than average price to rent the home. In some agreements, a percentage of this amount will go towards the down payment. In other cases, it does not. This all depends on the terms of your agreement. Either way, you will be generating more monthly income from the property than if you were to simply rent it out. You will also guarantee yourself a tenant over the lease term. They will have a sincere interest in the property, not wanting to break the lease for any reason.
With this greater interest in the property, you will find that your tenants will take extremely good care of the home. They will treat it as if it were there own, making the repairs and ensuring all maintenance is being taken care of. Some tenants will even want to complete upgrades or special projects to the home while living there. Of course, this is subject to your approval, but it can’t hurt having them add value to the home in case of a default. You can rest assured that they will not cause damage to the home or allow it to become damaged, run-down or dirty. They will have much more pride in the home than just your average tenant.
The tenant is going to do everything possible to make sure payments are received on time. If they default on their payments, the deal is off and you wind up keeping the additional amount they paid in rent each month. If this does happen, you can then opt to relist the property, with a whole new pool of prospective buyers. If it still isn’t the right time, you can find another candidate for a rent to own agreement. Either way, you will come out ahead.