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Home ▸ 📕 Investment & Financial Dictionary

Lease Option

What Is a Lease Option?

A lease option is an agreement in which a tenant has the option to purchase the property they are leasing at a predetermined price within a certain time frame. This allows the tenant to have more time to save up for a down payment and also gives them the opportunity to see if they really want to buy the property before committing to a purchase.

How does a Lease Option work?

A lease option is a contract between a lessee and a lessor in which the lessee has the option to purchase the property that is the subject of the lease agreement. In most cases, the option price is set at a predetermined amount below the fair market value of the property.

In conclusion, a lease option is a great way to get into a property you can’t afford otherwise. You can find lease options through real estate agents or by searching online. Be sure to have a lawyer look over the contract before you sign, and remember to read the fine print!

Related: How to Invest in Real Estate: 3 Ways to Get Started.

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