Choosing the right exit strategy for selling your house is crucial for maximizing your profits from your real estate investment. Lease options provide a great opportunity to potentially earn a higher return compared to selling the property outright. With a lease option, the buyer has the choice to purchase the home at the end of the agreed-upon period, usually between one to three years, or they can decide to walk away. You, as the seller, get to keep the initial option fee that was collected upfront as a down payment. This can be a beneficial option for both parties involved, offering flexibility and potential financial gains.
When you rent out your property through a lease option, you are essentially giving tenants the opportunity to test-drive ownership of the property. These tenants are motivated to pay extra for this chance, as they are looking to improve their credit and save for a down payment while experiencing the lifestyle of homeownership. By carefully selecting the right tenants and creating a well-thought-out lease option agreement, many investors have found success with this strategy. Let us guide you through the process of using a lease option to sell your rental property in California.
Asking Price
When you choose to sell your house in California using a lease option, you have the power to determine the sales price. This price is typically set higher than the current market value to anticipate any potential increase in property appreciation during the lease term. While you assume the risk of sudden value hikes, the tenant also bears the risk of decreasing property values. By setting the sales price now, you are in control of the transaction and can potentially benefit from any future appreciation in the property’s value.
Option Fee
When you choose to use a lease option to sell your house in California, you can expect to receive an initial option fee. This fee usually ranges from one to five percent of the sales price, though sometimes it can be as high as twenty percent. It’s important to note that the option fee is usually non-refundable. For example, with the national median listing price for active listings currently at around $450,000 as of May 2022, a 5 percent option fee would amount to $22,500. This amount would be credited towards the purchase price if the tenant decides to exercise the option to buy the property. By offering a lease option, you have the opportunity to attract potential buyers who may not qualify for traditional financing at the moment, but still want to secure a home for the future. This can be a win-win situation for both parties involved as it gives the tenant-buyer the chance to work towards homeownership while providing you with additional income from the option fee.
Tenants Maintain Your Property
When using a lease option to sell your house in California, you can rest assured that the tenant will take on the majority of the responsibilities. This includes tasks such as home maintenance and repairs, as well as the financial obligations associated with these tasks. Although you will still maintain ownership of the property and handle taxes and insurance, the day-to-day management will be in the hands of the tenant. This can provide you with peace of mind and alleviate some of the burdens associated with being a property owner.
Above Market Rent
When you choose us, you can maximize your rental income by using a lease option to sell your house in California. This strategy involves charging above-average rental rates, with the extra portion being referred to as the rent premium. The buyers will have the option to purchase the property at a later date, and they can deduct the rent premium they’ve paid over the contract term from the final sales price. If the buyers decide not to buy the house, you get to keep the funds from the rent premium. This method can help you generate additional income and potentially sell your property at a higher price in the future.
Speak to one of our experienced home buying professionals at We Buy Houses Bakersfield today regarding your property, with no strings attached. We prioritize ensuring that you achieve the best possible deal and have a positive experience when working with us. That’s why we offer a comparison of the traditional listing process versus the lease option method, and even provide a direct offer to purchase your property in cash, as-is. Our commitment to transparency means we provide detailed explanations of our calculations, empowering you to make an informed decision on the best way to sell your house in California.
Are you interested in learning more about how using a lease option can benefit sellers in California? Give We Buy Houses Bakersfield a call at (661) 282-0217 to find out more about the win-win advantages of this unique selling strategy. When you work with us, we can show you how a lease option can provide you with more flexibility and control over the selling process. With this option, you can attract more potential buyers and potentially sell your house faster than with traditional selling methods. By using a lease option, sellers can also earn rental income while waiting for the final sale of the property. This can help offset any mortgage payments or other expenses related to the property, making it a financially beneficial option for many sellers. Additionally, a lease option can allow sellers to lock in a sale price for their property, giving them peace of mind knowing what they will receive when the option is exercised. This can also help facilitate a smoother transaction when the time comes to close the deal. Overall, using a lease option to sell your house in California can offer a range of advantages for sellers looking for a more flexible and profitable selling strategy. Give us a call today to find out how we can help you take advantage of these benefits.