Understanding the Long Game with Lease Options.
It was learning how to source, transact, and monetise Lease Options that really got us going full time in the property world.
We love Lease Options but like everything in the property world they need paying respect and dealing with professionally and ethically….
….but when you do use the strategy properly then they can be a great way of portfolio build and/or source on for a fee.
We see so much emphasis these days on cashflow, cashflow, cashflow and of course cashflow is crucial, but what I love about Lease Options is that we have the option to buy or sell within the agreed term at a price already agreed.
Please have a quick look at the screen shot of one of the options we still hold. This house isn’t a great cash flowing deal, we rent it for £575 and the mortgage fee (we babysit the mortgage) is £417.80.
This means that in all honesty we probably break even BUT look at the equity in this one.
We took the deal in 2015 on a 10 year term with an agree purchase price of £81k. The property last sold in 2010 for £81k and whilst we haven’t had it valued, a desk top valuation would put it around £125k.
It’s a nice deal, this alone won’t make us rich, but when we were sourcing LOs full time we were talking on average 6/7 a month.
They are so powerful and very flexible. Once you understand the principle of how all this works then like many negotiations you start with a blank piece of paper and work out what works for all parties.