Oakland The Power of the Lease Option
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The Power of the Lease Option in Oakland, CA


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    • The Power of the Lease Option in the Oakland CA Real Estate Market


    If you are an Oakland real estate investor that sells properties using lease options you no-doubt understand why it can be an appealing avenue for those that need rental history and/or rent credits to help a challenging credit file. But, would YOU consider buying a property using a lease option You better!

    There is a reason that some of the most successful Oakland real estate investors, use the lease option technique (ok, there are actually several reasons!).

    Appreciation in Oakland real estate One of the typical advantages of controlling a property using an option is that the buyer retains the right to capture some, if not all, appreciation during the term. The longer the term, the greater the appreciation can be. In the single-family arena, where terms are usually 12-24 months, even moderate amounts of property appreciation can add up. For the buyer, especially, every percentage point of appreciation counts. And, if you're nice enough to offer (or get) a 24-month term in a market increasing at 3% annually, $6,000 on a $100,000 property is significant.

    Principle Pay Down for Oakland loans If an option is accompanied by a lease the possibilities are greater for increased equity build up. By applying a portion of the monthly lease payment amount to the purchase price of the property one has the opportunity to widen the gap between the market value and the loan amount. Depending on whether the monthly rent amount is inline with market rates...this is free money! A 30-year amortized, $100,000 loan at 7% begins at approximately $82 per month of principle payments. A $100 per month rent credit beats that, dollar for dollar, every month for almost 3 years!

    No New Loan Possibly the most noteworthy advantage of using a lease option in the residential market is that when the Optionee begins the purchase process no new loan is required. The prerequisite for this may be working with the right and informed mortgage broker but is usually easily accomplished through a refinance. This can mean no additional out-of-pocket monies for closing.

    No Down Payment in Oakland CA I know what you're thinking, I would never offer such a thing! You don't have to. As a Oakland real estate investor rich in tools to find motivated Oakland sellers, you could get your next Oakland home using this lease option technique with no money down. You don't have to tell the seller that an option fee may be customary!

    When you add it all up the numbers are hard to resist, so don't try! If you're in the market for a new (or new to you) Oakland home, use your own strategy against you!

    [ ..More About Oakland The Power of the Lease Option ]



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