Lease Option Basics - Posted by Greg(ND)


#1

Posted by JohnBoy on October 31, 1998 at 15:53:57:

You just subtract the rent credits from the balance owed on the purchase price when and if the option is exercised.

Example: You have a $100k house you l/o for $5k down as “Non-refunable Option Consideration”, $1000 per month with $300 per month in rent credits with an option to purchase at $100k.

At the end of 12 months the tenant decides to exercise the option. The purchase price was set at $100k. The tenant put $5k down plus $300 per month in rent credits = $3600. The tenant has $5k + $3600 = $8600 in total credit against the purchase price. $100k - $8600 = $91,400 balance owed in order to exercise the option and purchase the property.


#2

Lease Option Basics - Posted by Greg(ND)

Posted by Greg(ND) on October 31, 1998 at 13:48:54:

A Basic question from a new-bee.

How are rent credits applied to purchase price when a rentor exercises the option.

Thanks.