Lease Option Pricing

I have recently heard of lease options where you can charge your tenant a higher rent with no money down and lock them into a longer leasing period. Anyone heard of this? Thanks!

The majority of lease option “buyers” never buy the property. Therefore, to allow them to rent your property with no money down (no option premium or deposit) is very foolish. I would NEVER do that.


You alwasys get a HIGHER option fee than you would get for rental. They pay about $100 more monthly for rent than a regular rental and you get a MIMIMUM of $3,000 for an option fee (nonrefundable cash) before you let them move in. That is for a person with a credit score around 550. Most of the people that are attracted to this kind of offer have scores around 450 to 490. I ask for a minimum of $5000 option fee plus first months payment or it isn’t worth dealing with.

The last guy had really good credit and he gave me $4500 cash and rents for positve $350/month. The one before him gave me $6700 up front and rents for positive $275. That is the kind of money you should be looking for.

property manager,

in your experiences what % of tenants pick up the option to purchase?


I’m sorry, but I don’t know. I have never had anyone exercise their option. I have a lot of friends who are serious real estate investors and do a lot more lease options than I do. I know most of them have had VERY FEW ever exercise their options. I’d guess between 10% and 15%. At lease a couple of them have been sued when the tenant didn’t exercise their option and wanted their deposit back as well as money for maintenance they had done. One of these landlords is in the middle of a lawsuit now. It’s not a huge deal – about $10K I think.