What do you like more? lease options or renting? - Posted by Carson

Posted by Mark (SDCA) on August 29, 2005 at 10:22:20:

Renting. It’s the gift that keeps on giving. In more way than one. It’s a phenomenal way to build wealth.

I will LO if I don’t really want the house anymore ie if it turns out not to be a great rental. Normally a neighborhood issue.


What do you like more? lease options or renting? - Posted by Carson

Posted by Carson on August 28, 2005 at 23:01:41:

? Which do you prefer to do and why? If you do both, under what conditions will you do them?

Lease Options - Posted by Young Jedi

Posted by Young Jedi on August 29, 2005 at 16:06:51:

Lease options, by far. More money up front, more per month, and a nice back end if the option is exercised!

If it does sell on the option, it’s not hard to do a section 1031 to get into another deal.
Defer the taxes, and let your equity keep working.

A sale gives you an opportunity to upgrade your portfolio.
Also, the sale is usually at full retail without a real estate agent’s commission, and
the replacement property is usually at some discount to retail, if you buy right.

I have never gone through this cycle without gaining equity.

Another plus: A tenant/buyer is usually better easier to manage compared to a straight rental, at least in my experience.
They have more at stake, they take better care of the property, often improving it, and they stay longer on average.
Less turnover and vacancy means more money to you.

Of course, when they sell, you have to do some work finding a replacement property.
Since I enjoy this part of the business, so this is not so bad. Others may not agree.
Just be sure you actually do this step instead of spending the money and taking the tax hit.

I find these advantages of doing lease/options makes them better than a straight rental, at least for me.

Both depending on situation - Posted by Mike (Seattle WA)

Posted by Mike (Seattle WA) on August 29, 2005 at 13:26:29:

I prefer L/O properties because they cashflow so much nicer. I do have a straight rental though and am keeping it as such because I got a good deal on it and it is within walking distance of my perosnal residence, making management of it very simple indeed.