Lease options are a great way for many people to enter the property market. By using a lease option you benefit from having control of the property without the need for a mortgage. There are many reason for someone to use a lease option which include
- Having poor credit
- Living abroad so you don’t have a financial footprint in that country
- Can’t get a mortgage
- Only have a small amount of money to invest
With a lease option you promise to buy the property from the owner in 5 to 10 years for a pre-agreed amount and in the meantime you pay their mortgage and rent out the property. You can also increase the rental value by carrying out refurbishment and you become responsible for minor repairs. You can also, as a way of getting a better deal, offer to cover boiler repairs and then pay for boiler insurance to cover you.
I have clients that live abroad who use lease options. One of my clients has 10 lease option deals running and is bringing in £2000 a month in profit. How would earning £2000 a month in profit change your life for you?
How To Find Lease Option Properties
There are two ways of finding lease option properties. The first one is to go through a property sourcer and the second is to do the work yourself. I will explain both of these for you.
Lease Option Deals Through A Property Sourcer
Within my coaching group I have property sourcers that find deals for me. I then pass these deals on to my property coaching clients so that they can profit from these. To get a lease option deal with a good rate of return you will be looking to pay £2k to £3k and from this deal you will be looking at making a profit of around £200 a month. That is profit and not turnover. The property sourcer does all of the leg work in the form of dealing with estate agents, talking to landlords and dropping leaflets off and then they earn a fee to offer the deal to you.
Lease Option Deals Found Yourself
You can also find your own lease option deals. The best ways of doing this is through leaflet dropping (listen to podcast 3 for how to do this profitably), going around the local estate agents and forming relationships with them and getting to know landlords in your area that are looking to reduce their portfolio. Doing all of this on your own is a lot more work but if you have the time you will save yourself the fee that you would have otherwise paid a property sourcer for you lease option deal.
Speaking To Estate Agents
You can find your own lease options deals by talking with your local estate agents. You can ask them if there is anyone who is in negative equity or is looking to sell but can’t right now. These are the types of homes that are perfect for lease option deals