Just be careful mixxalot. Lease options in general are structured to be in favor of the seller. More often then not the tenant ends up not exercising the option, thus the option money ends up going to the landlord. I am not sure I would recommend a lease option in a declining market either. Why? Well think about it. First off you giving someone money that they will earn interest on. Second if there are circumstances that dictate a change in your life and you cannot exercise the option it will be lost money. Third, if the market is declining how will you base the final sales price? Will you price the home at the beginning of the lease term or at the end of it? If the market is really going to decline like we think it is, doesn’t it seem prudent to keep your options open in case something better comes along?
Anyways I am simply trying to give you some helpful words of advice. If you do choose to enter into a lease with an option to buy make sure you are well protected or set it up so you have as little exposure as possible. If this person is novice in real estate you may be able to dictate favorable terms for yourself. As a landlord I have had 2 lease options on properties I have owned. In both cases the tenants didn’t exercise and I did very well.
