The strategy you choose to sell your house can greatly impact your returns on your real estate investment. Lease options provide a lucrative alternative to selling your house outright, allowing you to earn a higher return on the sale. With a lease option, tenants have the opportunity to buy the home at the end of the agreement, typically within one to three years, or they can choose to walk away. You keep the initial option fee that you collect upfront as a down payment.
By renting out your property through a lease option, tenants have a greater stake in the property as they are essentially test-driving homeownership. These tenants are willing to pay extra for the chance to live the lifestyle of homeowners while also working on improving their credit or saving for a down payment. With the right tenants and a well-structured lease option agreement, many investors find this arrangement beneficial and start investing with a lease option strategy in mind. Continue reading as we explore using a lease option to sell your rental property in Kentucky.
Because you’re in the driver’s seat, you can set the sales price for the property now when you use a lease option to sell your house in Kentucky. Often set above market to account for the appreciation estimated to occur over the contract term, while you take the risk there could be a sudden hike in values, the tenant takes the risk that values drop.
Using a lease option to sell your house in Kentucky means that you’ll collect an initial option fee ranging from one to five percent of the sales price, though option fees of up to twenty percent are not unheard of, and the fee is typically non-refundable. With the national median listing price for active listings being around $450,000 as of May 2022, 5 percent would be $22,500, which would apply towards the purchase if the tenant exercises the option.
Tenants Maintain Your Property
While you’ll still hold the title and be responsible for the taxes and insurance, everything else will fall on the shoulders of the tenant when you’re using a lease option to sell your house in Kentucky. So, for example, tenants typically carry the financial responsibilities of maintaining the home and even making repairs.
Above Market Rent
You’ll make above-average rental income using a lease option to sell your house in Kentucky; the portion of rent paid at above-average rental rates is called the rent premium. The buyers would then deduct the amount paid into the rental premium over the contract term from the sales price upon exercising the option. Of course, if there is no purchase, you’ll also keep these funds.
Talk to one of our highly seasoned professional home buyers at We Buy 502 today about your property, with no obligation. At We Buy 502, we want you to know you made the best deal and feel good about working with us long after the closing. That is why at We Buy 502, we’ll compare the numbers of a traditional listing vs. the lease option method and even make you an offer to buy your property directly, as-is, for cash. At We Buy 502, we’re fully transparent, providing the detail of how each number in our calculations so you can make an educated decision about what works best to sell your Kentucky house.
Ready to learn more about the win-win advantages for sellers of using a lease option to sell your house in Kentucky? Call We Buy 502 at (502) 849-5950.