Investing in real estate property is one way to diversify your portfolio. If you are interested in choosing a piece of real estate, you’ll want to make sure you know all the facts before you sign a contract. If you’re thinking about giving lease options a try, then check out the following advantages and disadvantages you’ll encounter.

Advantages

  • Attractive to buyers. Tenants who expect to be in a better financial situation in the next few years will find this to be an ideal arrangement. Lease options, also called rent-to-own properties, are a good option for buyers who may have bad credit, but want to work on rebuilding that credit. By the time their credit recovers, it may be time to buy the house.
  • Lock-in price. You can negotiate for a lock-in price, meaning you won’t need to worry that the price of the property will rise every year. You can also choose to back out of the arrangement if your payments fail as well.
  • Trial period. A rent-to-own allows you to try out the property before you buy it for good. If anything turns out to be a problem, you can always look for options elsewhere.

Disadvantages

  • Less control. This is expected. Since you don’t own the property just yet, then absolute control is out of the question. If your landlord stops making payments, then that’s going to leave liens on the property.
  • Cheaper price. In case the price of the property falls, you’re still going to need to stick to the lock-in price.
  • Scams. There are plenty of rent-to-own scams out there. You’ll need to be vigilant to ensure you aren’t falling for a trap.

Finding Help

Whether you are planning for lease options or if you are thinking of having your own property rented out with a lease option, hiring the help of a firm that specializes in commercial real estate investing in Phoenix is a must. Consult with a pro and discuss possible avenues. This is a good time to think long and hard about your goals, why you want to buy property, and why choosing a rent-to-own property is the right decision for you.

Learn more about rent-to-own options along with other ways to invest your money through real estate. For commercial real estate investing in Phoenix, get in touch with Everyday Investments Realty.