Leasing your property especially your home can be one of your biggest decisions to make. It is best that you are equipped with the right knowledge and strategies. Understanding what lease is and all relevant to it is essential to this business. So before venturing into this, do whatever it is needed to make sure you understand all aspect of your lease, so that during negotiations with the tenant or the lessee you know what to do to get a reasonable deal. Below are the 5 essential tips before leasing your home;

• Get to know your potential tenant or lessee – This is the person that will be signing the lease. It is important to find out more about that person because you cannot just rely on mere emotional trust. Also, credit check may not be enough. It will also help if you get in touch with the person’s references and present and past employers. You need to make sure that the employment status is true and that they are really working for that company.
• List down the names of the tenants that will occupy your property – As owner of the property you have the prerogative to get the names of the persons occupying your home. You can add a section on your lease where you can list down their names. You can use this as reference then double check with the potential lessee that the names are correct. You also have the right to tell them that only the listed people may live in the property.
• Explicitly state the rent amount and late charges if applicable – Make sure that in the lease there is a comprehensive section about the rent amount and applicable charges. You need to clearly state anything related to the rent amount and make sure that it is easily understood by the future tenant.
• Get access to your own property – One thing that you should not forget on the lease is a section about getting access to your own home. You may state in the lease that you can peacefully enter the property at any time even without the tenant’s permission.
• List down the little things that may be deemed important to your lease – This may include the house maintenance and repair. You need to make sure that the future tenant clearly understands who is responsible for what. You can also mention about changing anything on the property including the door locks and keys. You need to clearly state what you want and if they need to get your permission if they do so.

In drilling down the correct details and understanding more about the lease can help you a lot during negotiations and in the duration of the lease. With the right tools and knowledge, no one can take advantage of you and your property. Your home is still your own, it is part of you since you put much effort and had earned money in building it up. So don’t let someone ruin your property and get away with it.

In investing in real estate property, one needs to know more about Options since it may bring potential huge income. A real estate option is the right to purchase a property for a specific price at a specific period of time. This is a legal agreement between the future real estate buyer and the owner of the real estate property.  The options contract is almost a giveaway because of the flexibility feature it gives to the potential buyer. In return, the buyer will have to pay an option fee to the property owner to compensate on the right given to the buyer. The property owner also has the flexibility to make the contract transferable or assignable to another potential buyer. Here are some things you must know before entering into an options contract:

• No Obligation From Potential Buyer – Although it is a legal agreement entered between the two parties, the property owner cannot impose or force the potential buyer to make the purchase. On the seller’s, he has to stick to the terms specified in the options contract regardless of the market value of the property.
• An Obligation to Sell the Property – The owner’s obligation to sell the property at the specified price at a specified period is created. When the buyer exercises the option to buy according to the terms described in the contract, then the owner has to willingly abide to the terms of the options contract.



• Advantages for Potential Buyers – In this kind of contract it can give your potential buyers some advantages and disadvantages. One advantage is that buyers can have enough time to find money to pay or finance the property. Another advantage is to check on the feasibility for property development or future business potentials as well as potential property problems. The most significant advantage is it allows buyers to bargain for a smaller price then may in turn have large gain.
• Disadvantages for Future or Potential Buyers – A buyer should take into consideration the option fee that they need to pay before they decide to make the purchase. One just needs to make sure that it’s not too high.
• Disadvantages for the Property Owner – The one thing that the owner loses in this type of contract, is the opportunity to market the property to other potential buyers. Especially if the term duration is too long and market changes may have bring the property higher appraisal value.

In any investment that you may undertake, it is essential to consider the pros and cons. Whether you are a buyer or the owner / seller, you need to make sure you have the right knowledge and education in order to make a sound decision. Also, you need to consider all aspects to check the real estate property’s value and future business potentials. In this way, you will not only benefit on the present state of the property as well as the profit potential it may bring in your future.

If you are planning to sell a parcel of your land but is finding it difficult due to lower land prices, then it is best if you enter into an Option to Purchase agreement with your buyer. In layman’s term, Option to Purchase is an agreement between a buyer and seller wherein the seller allows the buyer the right to buy a certain property at an agreed price at a specified time period. There is a booking fee for this option and is usually non-refundable should the buyer will not opt to buy the property in the given period according to the contract.

With any options to purchase agreement comes what you call a deposit, or a reservation fee, or a booking fee, which is non-refundable. When the buyer or optionee will not exercise his option to purchase, this booking fee is taken against the buyer, so this is really a good thing for the part of the seller or optionor.

In addition to that, option to purchase will let an optionor sell his lot at a full asking price even if the current market value is not high since the seller is given a choice to pay you in full at a given period, say 5 years to 10 years from when you entered the agreement. This will surely benefit both parties as the seller is getting his asking price and the buyer only paying when he see fits.

Here are some of the benefits that a seller is able to get with options to purchase agreement.

• A non-refundable booking fee which is paid by the buyer and kept by the seller should the buyer will not push through with the agreement.
• You get to sell you property at a price you desire even if the current market trend is low or demand is not good. Why? This is because your buyer is allowed not to purchase the agreed asset should he finds it not satisfying to his requirement.
• You get to sell your property easier and faster as more buyers now opt to enter this kind of agreement.
• You are sure that after the period declared in the agreement, your buyer will pay you the amount agreed or still you get to keep the booking fee. Now that is a win-win situation for you.

Summing it up option to purchase provides benefits for the optionor and optionee. For the buyer, they can be sure that the lot they have entered the agreement into will never be sold by the seller even if full payment is not yet given. The payment will not be paid immediately instead it will be paid within the period given such that the buyer can still have more time to get funds to pay or given more time to think whether the property is a good buy or not. The buyer is given that option, although this may not sound good to the seller, he can still have a payment in the form of a booking fee.

Home seekers, businessmen, and small and big time investors alike have taken advantage of the benefits of lease option. Lease option is often referred to as “rent to own” but is not always the case. A lease option is an agreement between the lessor (landlord/seller) and the lessee (tenant/buyer) wherein the tenant is given the option to own the leased property within the specified or agreed period of time. In lease option, the landlord/seller is compelled to sell the property should the lessee/tenant exercise the option.

Lease option is the combination of straight option and rental components. This involves two things: rent, which is mandatory, and purchase, which is optional. This means that the lessee continues to pay the rent to the landlord until he is willing to terminate or exercise the option to purchase.

Those who want to own homes, however, do not have the amount of money to pay the price upfront, can sign up for lease option. Lease option allows them to pay monthly rental dues, which a portion of it goes to the purchase. Lease option gives them ample length of time to complete the payment.

To businessmen and investors, lease option presents great opportunities. If you are a budding businessman and are looking for a property where you can set up your business, however, you lack financing, lease option can be considered.

• With lease option, you can cut out the business start-up cost. You do not have to allot big amount of your capital investment for the facility; instead you can allocate a portion for the lease.
• If you already decided to purchase the property upfront, you can have an agreement with the landlord to pay the rental fee and the agreed purchase price spread out over the specified period of time.
• Another option is you can continue paying the monthly fees until you are able to find a permanent financing to fully pay the purchase price. This option is often selected by businessmen who find the location of the property strategic to the business on a term basis.
• Should you think that the property you are leasing is not worth the buy, you can terminate your option and walk out of the contract. The landlord will have no right to force you to buy the property.

If you are an investor, then lease option is even more attractive to you.

• With lease option you have the choice to either use the property or sub-lease the property. If the property is huge, you can occupy a part of it and sub-lease the rest of it.
• Also, with lease option you can have the sandwich option, and option to buy and sell the same property.
• You can make improvements on the property to either appraise its market value and sell it for a profit or use the money invested on improvements as partial payment for the purchase.
• You can also get profits for selling the right to purchase after additional investment on physical improvements on the property. An investor can engage into lease option of $50,000 on a property and pays its physical improvements, say $10,000, to appraise its market value to $70,000. He can then sell the right to purchase to $20,000 and the new lessee will close the deal with landlord for $50,000.

Before getting involved in lease option you should remember that the lessee/buyer purchases the option too, thus, both the lessor and the lessee, apart from the purchase price of the property, must also agree on the cost of buying the option. This means that whether the lessee will exercise his right to purchase or not, he has to pay for the agreement. They will also have to have mutual agreement on the monthly lease payments and other terms of leasing, such as taxes, maintenance, insurance, security, etc. More importantly, the lessee/buyer must keep in mind the timeframe of the lease option because his option to buy is only good within the specified period of time other it will be defaulted to the landlord.

There are many hurdles that a person can think of in investing in real estate. It may seem unreachable to own a real estate property when roadblocks are in our way. But there are ways to overcome these roadblocks and one can start by identifying these and know more about it. In this way, one can outline possible solutions and find out ways of getting rid of these hurdles. Here are the three main roadblocks of Traditional Real Estate Investing:

Bank Qualifying – All who wants to purchase a property through financing will have to face and go through this hurdle. Most of the time, it involves getting out of your pocket a 10 to 30% down payment. So a good amount of money is needed as your personal signature or guarantee. A good credit standing is also required.

Traditional Landlording – Landlording started way back during the Roman Empire where manorial system was the way of life. Nowadays, it has the same concept but in a better and improved manner. The problem with traditional landlording is that it can be labor intensive and one must have a management skill when it comes to maintaining the property and taking care of it.

Traditional Rehabbing – Rehabbing is when an investor buys a property and needs to do some repair and rehabilitation before selling or leasing it to potential buyer or leaser.  Knowledge and experience is necessary in doing such rehabilitation process. You may have to invest more time, effort and money in order to get the property more marketable.

It is not easy to invest in real estate, but you don’t have to be discouraged or dishearten. There are ways in getting out of it and, as the cliché goes, there is a solution for every problem. Any obstacle can be overcome by not giving up easily. You just need to have the right knowledge and resources. These roadblocks should also not hold you back and it may be worth it to take the risks. It will be difficult at first and consumes most of your time, but the more you work on taking over these hurdles the closer you will be in getting rid of them.

There are several reasons that one can think of to not succeed in real estate, like you don’t have the time, capital or the knowledge and education. If you say you don’t have the time, it is something that you can work on. All of us have 24 hours in a day, so adjust your schedule and be more wise on where to spend your time. If it is about capital or money, then you can overcome it by knowing the correct strategies. You don’t have to have the money or use your credit to invest in the real estate, with the right planning and strategy, this hurdle can get out of way in no time. And lastly, if you say you don’t have the knowledge and education; it’s not even a roadblock nowadays since you can easily search almost anything in the internet.