Lease Option vs Land Contract

Same question

A Lease Option is basically just a rental agreement with the addition of a purchase option. The tenant rents the property for a period of time and pays the owner some amount for an option to buy the property for a certain period of time and at a specified price (or formula for price). At any time during the option period, the tenant can exercise his option and buy the property. Often, the landlord will credit some or all of the tenant’s rent payments toward the purchase price. This is often called Rent to Own.

A land contract (also called a contract for deed) is basically owner financing with the deed being transferred after a certain number of payments are made (usually all of them). The seller usually keeps the deed until the property is paid off.


When doing a land contract the seller pays ALL Sales Taxes as if the property
was sold that day (the day of the signing)

Jeremy Blunt

…and what’s worse is that often land contracts will fall through and you’ll need to take the property back. Depending on state laws and how much the “buyer” has paid, you may even have to go through the foreclosure procedure (which can take months). A couple of the reasons that I NEVER do land contracts.


Here in Wisconsin the foreclosure process is horrible. At least 6-9 for the process to carry out. This is why we only do rent to own’s. Therefore we can go thru the eviction process 2-3 weeks versus 6-9 months. Cheaper as well.


Well i have a question about buying a duplex under a land contract. i want to know if i’m able to have the seller convey the property into a trust so that if they acquire any debts, his creditors will not be able to apply any liens to the property. does anybody know if this works?

Gatten’s Land Trust approach vs. lease-option