Real estate purchase lease options, also known as lease-to-own or rent-to-own agreements, allow tenants to rent a property with the option to purchase it at the end of the lease term.
Here are 20 types of real estate purchase lease options:
- Straight lease option: A lease agreement that gives the tenant the option to purchase the property at the end of the lease term.
- Lease option with purchase price: A lease agreement that specifies the purchase price of the property at the beginning of the lease term.
- Installment lease option: A lease agreement in which the tenant pays installments toward the purchase price during the lease term.
- Percentage lease option: A lease agreement in which the tenant pays a percentage of their rent towards the purchase price.
- Balloon payment lease option: A lease agreement in which the tenant makes a large payment at the end of the lease term to purchase the property.
- Purchase option fee lease option: A lease agreement in which the tenant pays a fee for the option to purchase the property.
- Lease purchase option: A lease agreement in which the tenant and landlord agree to a purchase price at the beginning of the lease term, and the tenant pays installments towards the purchase price during the lease term.
- Lease option with rent credit: A lease agreement in which the tenant receives rent credits for paying rent on time, which can be applied towards the purchase price of the property.
- Equity share lease option: A lease agreement in which the tenant and landlord share equity in the property, with the tenant building up equity over time.
- Joint venture lease option: A lease agreement in which the tenant and landlord enter into a joint venture to purchase and develop the property.
- Seller financing lease option: A lease agreement in which the seller finances the purchase of the property, with the tenant making payments to the seller during the lease term.
- Lease option with rent-to-own credit: A lease agreement in which the tenant receives a portion of their rent back as a credit towards the purchase price of the property.
- Lease option with lease purchase agreement: A lease agreement in which the tenant and landlord enter into a separate lease purchase agreement at the beginning of the lease term.
- Lease option with right of first refusal: A lease agreement in which the tenant has the right of first refusal to purchase the property if the landlord decides to sell it.
- Lease option with assignable option: A lease agreement in which the tenant can assign their option to purchase the property to another party.
- Lease option with early exercise option: A lease agreement in which the tenant has the option to exercise their purchase option before the end of the lease term.
- Lease option with lease extension option: A lease agreement in which the tenant has the option to extend the lease term if they are not ready to purchase the property at the end of the lease term.
- Lease option with rent escalation: A lease agreement in which the rent increases over time, with the extra amount going towards the purchase price of the property.
- Lease option with buydown: A lease agreement in which the tenant pays a lump sum at the beginning of the lease term to lower the purchase price of the property.
- Lease option with subordination agreement: A lease agreement in which the landlord agrees to subordinate their interest in the property to a lender if the tenant exercises their option to purchase the property.