Maria,
Can you lease option a house for $2k per month in your market?
Depends…
What are market rents in your area?
The thing is, with a property purchased using any method, it is wise to have more than one exit strategy.
Just because you buy a house subject to the existing financing, does not mean you must lease option as your exit.
This does of course give you three profit centers.
Hopefully when buying, using any method for purchase, you are utilizing the golden rule…which is, make your money when you buy.
What does that mean?
Buy for BELOW TODAYS VALUE!
To do otherwise, is to speculate, and that’s no way to build long term wealth.
So, look around your market, determine market rents, and perhaps look for some rent to own, or lease option homes as well.
This will give you an idea of what others are charging monthly etc, and should let you know where you need to be with yours.
I live in an area where the average home is between $250000 and $300000 dollars. Can the “subject to” principles be applied here?. I just purchased The ABCs of “Subject to” and was wondering if someone who has used this course in the $250000 to $3000000 dollar range?
I’d love to hear of anyone else’s experiences.
I’m wondering if price matters due to the fact of lease optioning the property. Is there a price point where it is harder to lease option? I’m wondering if people are willing to lease option a property and pay $2000 a month to do it?
In some markets $250,000 is a garden shed while in other markets you would have to build a custom home to spend that sort of money.
If you are concerned about the rent levels that people pay and what sort of extra they might pay to option the home you need to look in the local paper to get a feel for local rents. A small margin above that is what most people can handle.
Also compute what they would likely pay if they purchased the property and took out a loan. If the numbers are similar then you are in good shape. If the numbers show that buying is a lot cheaper it will be hard for people who want to live there to afford the higher number.
It is really going to come down to your market (average prices, average rents, cost to buy on a monthly basis, capital needed to get into a property).