Land Contracts vs. Lease options? - Posted by David MacGown

Posted by Steve-Atl on December 13, 1999 at 08:45:29:

I like land contracts when I buy, but lease/options when I sell. Land contracts give you as the buyer an equitable interest in the property. Lease/options, if properly worded, do not give the buyer an interest, so they give you more control when you sell.

Land Contracts vs. Lease options? - Posted by David MacGown

Posted by David MacGown on December 12, 1999 at 16:43:17:

Land contracts seem to be fairly popular in my area,more so than l/o’s. I don’t see much about land contracts on this sight but they seem nothing more than glamorized lease options to me.

What is the difference?

What are the pro’s and con’s?

and if that gets too confusing which is best to use overall?
(i.e. what will make the most amount of money in the least amount of time with the least effort?)

Thanks for everything!

Re: Land Contracts vs. Lease options? - Posted by Brad Crouch

Posted by Brad Crouch on December 13, 1999 at 12:15:42:


A lease option is simply a lease with an option to purchase. Within the agreed upon term, the tenant buyer must obtain the financing to exercise the purchase.

A land contract IS the financing vehicle! With a land contract, the purchased IS financed.

Also, with a land contract, the occupant has no opportunity to change his mind and walk away from the deal (as easily as from a L-O), in the event that the school system turns out to be not as good as originally thought or depreciation occurrs rather than appreciation. Or if “terrible” neighbors are discovered.

The tenant buyer in a L/O has more control over their future than an occupant involved with a land contract.