What is lease option?

Question

Accepted Answer

Lease option is a real estate agreement that allows a tenant to purchase the property at a later date.

Lease option gives the tenant the right, but not the obligation, to buy the property.
The terms of the purchase, including price and timeline, are typically agreed upon upfront.
During the lease period, the tenant pays rent as well as an additional fee for the option to purchase.
If the tenant decides not to exercise the option, they forfeit the additional fee but can continue renting the property.
Example: A tenant signs a lease option agreement to rent a house for two years with the option to buy at the end of the term.
Example: The tenant pays an upfront fee for the option, in addition to monthly rent payments.

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