This week on Ask Rob & Rob, Roy Faulkner asked:
Are lease options a good idea?
A lease option, for those who don’t know, is where you agree with a vendor that you have the option to buy their house from them at some point in the next X years (depending on the option) at an agreed price, and in the interim you take the property over and rent it out. You will usually cover their mortgage, rent the property out as a BTL, and then have the option to buy the property at the price you decided when you signed the option.
Sounds like a good idea, so why don’t more people do this? Well, the main target market for lease options are people in negative equity. During the crash there were lots of people in this position, but nowadays it’s not so likely. This strategy relies on finding people in negative equity. There are also examples where folks have taken advantage of people in tough situations, giving lease options some bad press.
Finally though, the answer to this question touches upon the fact that lease options are hard work. Finding these opportunities in the first place is tough, and digging up the right properties is going to be your biggest challenge.
Do you have a property-related question for Rob & Rob? Whether you’re a first-time investor or a seasoned pro, you could feature on our next episode. Just call 013 808 00035 and leave a message with your name and question (normal UK call rates apply).
Or if you prefer, click here to leave a recording via your computer instead.
Subscribe in your favourite podcast app to get every episode automatically sent to your phone.
Share your thoughts on this episode – and find out what others are saying – in the Property Hub Forum.
Go to the forum
Did you enjoy this episode? Then please leave us a review: it’s the best way to say thank you, because it helps others find us.
To show our appreciation, we’ll read out your review on the show! Learn how to leave a review in Apple Podcasts.