One of the questions I am often asked at property networking events and property investing seminars is: “How do I find Purchase Lease Options”.
The answer is I don’t just target vendors who would be prepared to grant a purchase lease option on their property, for the simple reason that this may not be a viable solution for many vendors, particularly those who are selling because they need the cash.
Instead, I focus on finding motivated sellers who have a property related problem and some of whom I may be able to help with purchase lease options.
Having said this, I want to highlight, two particular types of motivated sellers for whom Purchase Lease Options could work really well.
The first type is the vendor who has a property listed with an Estate Agent and a letting agent at the same time. I am sure you will have noticed this in the past.
This would suggest that the vendor probably wants to sell but is struggling to do so and thus is prepared to rent until they can sell. This is exactly what you are proposing with a Purchase Lease Option.
The second type of vendor is the tired or retiring landlord, who no longer wants the hassle of their buy to let property. I find that this type of vendor may also be more open to creative solutions than the average motivated seller. You can find these landlords by looking in newspapers or online for landlords who are renting their properties out or you may even meet them at property networking events.
Having identified the vendor you need to know what to say to them. I recommend you never use the words Purchase Lease Option, as most people will have no idea what you are talking about. You need to keep the language really simple and demonstrate how you are solving their problem.
There are two simple questions you can ask the property owner to determine if they would consider granting you a purchase lease option on their property.
1. “Would you be interesting in renting your property on a long term let for between 3 to 5 years?”
2. “Would you be interested in selling the property to me at some point in the future?”
If they answer yes to both of these questions, then there is a good chance that a Purchase Lease Option could work. It then comes down to a matter of negotiation around the purchase price, the length of the option and the monthly payment.