These situations are typically not a good deal for the renter.
Hypothetical Example: Our friend Owen Tonzadough wants to buy a lease option. The gracious seller-landlord agress to let Owen rent the place for 1700 per month, plus $300 per month option to purchase. The entire $300 per month is applied to the down payment. The two parties agree to a price 5% above current marklet value. Other equivalent rentals in the area are going for 1850 per month. GOod deal ? Only if you exercise the option to buy, and the price is still a good one when the option comes due. Owners do these deals to get more than market rent.
I looked at one of these in the mid-90’s in Point Loma. The owner wanted slightly below then-current market rents plus an additional several hundred per month for the option to purchase. I also think there was a fixed payment up front (non-refundable deposit) that was part of the option to purchase. At that time, when prices were stagnant, he wanted to set the purchase price about 5% above the market.
