Site Loader

Help your Customers Buy and Sell More.

The modality of rent with option to buy is an alternative that is helping some real estate agencies to renew their portfolio of real estate. It is uncomfortable and frustrating to have a property that is not sold. You invest in advertising that does not generate results and you have an owner normally dissatisfied with the situation. The rent with option to buy   gives the opportunity to the real estate agency to get rid of the property and obtain some benefit for it. This modality of rent with option to buy is very used by specialized agencies only in rent, since it represents them greater income than the normal rent. However, not all properties are ideal to qualify for the rental formula with the right to purchase. This modality is perfect, for example, for those properties whose owners live abroad (or in a different province), owners who bought a house on the coast years ago and now want to sell fast. Let’s see why this modality of rent-sale is ideal.

The Rent with Option to Buy. Ideal for foreigners.

To understand why, let’s analyze the situation of the homeowner. Living abroad and being interested in selling, the rent with option to buy is ideal, because they ensure that your property is kept in perfect condition, they save on the expenses of having to rent your property for seasons and ensure the sale to An adequate price. It is not easy for a foreign owner to manage his property from his home country. Seasonal rental agreements have their problem and management costs that generally leave the owner with little or no benefits. Remember that the owner has additional community expenses and tax payments once a year. In addition, others that may appear as: non-payment of fees, damage to the property, conflicts with the community of owners, civil liability for damages to third parties … Which leads them to be themselves who opt for rent with option to purchase. Generally to citizens of the same country. The classic example I observed in the real estate fair in London where an agency in Alicante, offered all its properties under the modality of rent with option to purchase. If you are a real estate agent you would do well to catch up on how the rental modality with purchase option works and offer it to some of your clients. Your commission will not be so high, but you will have won a satisfied customer. And this is worth a lot.

The Rent with Option to Buy. Everything Depends on the Contract.

However, remember that this rental formula with option to purchase is viable depending on the type of contract you offer. It all depends on the conditions of the contract. Every rental contract with option to purchase is regulated according to the lease laws of each country. It is always a mixed contract, composed of purchase and sale and lease or rental with option to purchase. For this option to be attractive and profitable for both parties, special emphasis should be placed on these points: 1.- Establish an adequate sale price. It is generally a price of 10% above the current market. Sometimes the same price is stipulated in which the property would be currently that’s why the house for sale in Rawalpindi are much expensive. 2.- Initial deposit that is usually 20% of the price of the house. Sometimes this clause is not included to make the rental offer with option to purchase more attractive. 3.- Rental fees. They are usually 75% However, with 100% of the rental fees it is more attractive and rents faster. 4.- Maintenance expenses. I recommend that the tenant be paid by the community and possible reforms. 5.- Specify how many years the tenant must be renting the house before being able to buy it. Generally they are 3 years for residential real estate and 5 years for commercial and industrial real estate. “The rent with option to buy is an agreement between landlord and tenant by which it is stipulated that the tenant may buy the house after residing in it for a certain period of time, normally up to a maximum of five years. A rent with option A purchase presents a series of advantages for both parties: owner and future buyer “. Rent with Option to Purchase Benefits to Both Parties. This option is availed in Park View City where the purchase allows the tenant, not having to apply for a mortgage loan and monetize their rental money. For the owner, the main advantage is not economic, but rather to solve the problem of keeping your property in condition by not being able to sell it. The situation of a property is very different from the perspective of the owner and the real estate agent. The owner is interested in selling, but he is more concerned about the security of his property and the expenses incurred as long as it is not sold. Temporary renting is not a very attractive option for many owners. The problems that usually arise with the rent with option to buy is that the owner is sometimes greedy and only thinks about his part of the transaction. A business is a business when it benefits both parties equally. Increase the price of housing, because it will charge in a few years is the most common handicap so that tenants do not accept this option. Others is to demand that the purchase be made within x years, not giving the tenant the opportunity to change his mind. I want to take advantage of the occasion given by the subject of this article to show you a real case of rent with option to purchase that has benefited an owner, 3 tenants and the real estate agent. A real estate agent from Cádiz had 3 industrial warehouses or warehouses for sale. He had been selling them for 14 months and in the end he decided to convince the owner to rent them with the right to buy. The terms and conditions of the contract were quite favorable for both parties and the fair price for both parties. The agent began to promote the industrial warehouses for rent with the right to buy and in less than 2 months he had already rented them all under this modality. The real estate agent earned less than € 7,000 euros when renting the 3 ships, (having sold them would have reported more than € 40,000 euros), but I leave the owner happy and … here is the result of being consistent, he won 2 clients that They gave 3 properties for sale, (of the 2 companies that rented the ship), and the owner gave him another property for sale. Sometimes you have to earn less than expected, in order to earn more in the future. Therefore, dust off your notes on the rental option with purchase option and start offering it to some of your customers as an alternative for sale . You will verify that more than one is interested in this option. Please share this post with your colleagues and leave us a comment . Do you think that the rental mode with the right to buy can be applied to commercial premises and offices? Your opinion interests us. Thank you.  

Priscilla Simpson