Why Real Estate Investors Should Consider Lease Options In Kansas City

Real Estate Investors

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 all real estate investors should consider lease options in Kansas City!

As a real estate investor, you may have a property you want to sell but haven’t been able to quite reach that price that you want. It happens all the time but you don’t need to take a loss, you just need to change the plan a bit. By utilizing a lease option, you will be able to get the price you want and bring in extra income, while helping someone discover their dream of home ownership. Continue reading on and find out some more great information but please don’t hesitate to ask any questions you may have about the process!

Sell For The Price You Want

When you list a property in Kansas City, or anywhere for that matter, there are no guarantees that you will get your asking price. If your property is listed and not attracting a buyer, you may consider dropping the price, but before you do that, you should consider a lease option. 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 in regards to price, down payment, rent credits, and maintenance of the property. Take into consideration, market changes that may occur while the agreement is in place, because you will not be able to renegotiate the price if the market shifts. That means you may have to give up any appreciation if the market increases, however if the market decreases, the buyer also cannot renegotiate the price. The buyer could still opt not to exercise the option, which means you would have to find a new buyer willing to pay higher than market value for the house. .

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. Another benefit in this regard is that you will have a tenant that has more of an interest in the property so won’t risk violating the terms of the agreement by paying late or all out missing payments. By them signing the rent to own agreement and paying more than average, you will get a serious future buyer.

Other Benefits

With this greater interest in the property, you will also 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.

Low Risk

Since the tenant is wanting to be a home buyer rather than a renter, they are more likely to ensure payments are received on time, as they may need that evidence to get a home loan in the future. If they do default on their payments, you may void the contract, but the downpayment and any additional rent is yours to keep. The biggest risk is if they do default, you will have to evict them so that you can market the property again. At this point, you can either list for sale or for lease to own. Either way, you will come out ahead.

Learn more about how lease options can benefit real estate investors in Kansas City! Get in touch with Mastiff Home Buyers today! (816) 535-0076