For Rent Method or a Lease Option

A California real estate attorney explains the for rent method or as it is also known as a Lease Option.


Seller Benefits:

  1. They can save 5 or 6 % on Realtor fees and receive the full value of their asking price.
  2. They can also receive some or all of the option fee
  3. They can avoid many landlord headaches because they can typically select from a strong pool of qualified buyers who really wish to purchase the property.
  4. .They can receive market rent or a bit more.
  5. They can ask full value plus some bump for anticipated price escalation at the end of the contemplated option period.

Some Seller Risks which can be mitigated in well structured deal.

  1. They buyer may not exercise the option and walk away from their option fee
  2. The property could go down in value
  3.  The tenant may harm the property.

Buyer Benefits:

  1. Find out if they like the neighborhood or schools
  2. Buy time to amass their down payment
  3. Buy time to improve credit to qualify or the type of loan they desire
  4. Opportunity to live in the type of home why would like to own.

Buyer Risks

  1. They fail to perform per the lease or they decide to walk away from the deal thereby forfeiting their option payment.
  2. They buyer would also lose the “excess” rent if there was any and money they put into the property.
  3. A buyer may also wish to record their option… depending on the jurisdiction they are in.


I am an attorney and realtor but I can also set this up where I am the principal and I assign the option to a future tenant they you approve while you still market the home on your own up until the time you sign the deal with the prospective lease option purchaser.


Let me know if you would like to get started… Thanks


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