Hello - I am buying a house that I am going to lease option to a tentant/buyer. I am trying to figure out what a reasonable amount of my tenant/buyers monthly lease payment I should credit toward the future purchase of the home. 24 month lease, 5K deposit, I am buying the house for $190K and going to give the option to purchase at $209K. Is there a standard amount to credit to the future purchase??? 100% of it, 50%, 20%???
The amount of rent credit you offer is determined by a number of factors.
For starters, I suggest you go with a twelve month lease, rather than the 24 months. It’s to your advantage to keep the term shorter. You can always renew at the end of the original 12 months, if you want to.
As far as the rent credits go, what type of real estate market are you in? If the market is slow and you need to market hard to find t/b’s, then a generous rent credit is in order. I routinely offer 50% rent credits to attract interest. My goal is to fill the property ASAP, put it on auto pilot, and move on to the next one. I have even gone so far as to offer 100% credits when needed and when the numbers permitted me to do so.
On the other hand, in a strong sellers market where there is no problem moving homes, the rent credits can reflect that and be reduced to, say, 25%.