How do Lease Options work?

To buy a property, you would need a  deposit and a mortgage, in this economic climate, lenders usually require 25% deposit, for a house of £100,000 , you  will need £25000  and £75000 mortgage.
For a 75000 mortgage on 6% , the mortgage is £375  per month.   If  this property can generate rental of £600 per month, then  you will get £225 cashflow per month...
For this example, you will need to find a vendor whose mortgage on the property is £375 per month, and then make agreement to take over his mortgage, and baby sit his mortgage until such time  you can find a lender  for your mortgage...and acquire the deposit.. This can take a while, and may be a few years so lease option is an excellent way for you to take care of the property while you are looking  for ways.  Do not forget that you will also need to pay for legal cost and other ancilliary cost when acquiring properties...

Methods of acquiring it can be by ways of changing your spending  habits...make  more money by doing extra business such as internet marketing, Joint venture with others.... there are many ways.
If you like to learn more, please  email  askanitali@gmail.com 

What is Lease Options

In the current  economic climate where lenders are very strict to their lending criteria, as a result  many  people are not able to sell their home and move on with the lifes...Lease options is one of the  strategies to buy home and help people to move on.  Of course this will only work if the vendor does not need the sale proceeds  to buy  another property for them  to live.  Lease Option will work very well for vendors who are selling their second home or people who are downsizing  or people who are moving in with their extended family home etc.

The buyer is unable to get a mortgage for the house he/she wants to buy, so he can approach the vendor who will continue to have the mortgage in their name, and the buyers will  make a monthly payment which is equate to the  market rent  plus extra which will goes towards the purchase price of their new house. The buyer will also be require to put up a sum of money towards their new home which  acts  as the option fee to purchase  a house within a certain time frame, we can also assign  part of this premium as deposit/part payment of the house when he eventually exercise the options…

Many investors are generally familiar with the concepts lease option but many real estate/property investors confused the two, and this article will help you understand the tax, legal, and practical issues between the two.

Lease Options

First, let’s start with the lease option, which is really two things, a lease and a purchase option. A lease is a contract for the use and possession of land, creating a landlord/tenant (or "lessor/lessee") relationship.
A purchase option is a unilateral agreement wherein the optionor ("seller") agrees to give the optionee ("buyer") the exclusive right to the purchase the leased premises. The option price is generally set at a fixed price at the inception of the lease, although it does not have to be. At any time during the option period (which generally corresponds to the lease period), the tenant can exercise his option to purchase.
An option is not the same as a regular purchase contract, which is a bilateral agreement. A bilateral contract legally binds both parties to the agreement, whereas an option only binds the seller. An optionee is not bound to buy; it is his option do so (or not to do so).
A lease with option arrangement is not a sale, but rather a landlord-tenant relationship. In rare cases, a court may re-characterize the transaction as a sale if it looks like a sale. Furthermore, the IRS does not classify a
real estate lease option as a sale until the option is exercise.
(see, Tax Court Memorandum 1999-11).
If you are interested to learn more, please email  askanitali@gmail.com