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Lease option

Lease with Option to Buy: Turn Your High-Mortgage Property into a Profitable Investment

 

Is your mortgage payment higher than market rent? You're not alone.

Many Phoenix property owners are stuck with mortgages from recent purchases at high interest rates, making traditional rentals cash-flow negative. A lease with option to buy strategy transforms your burden into opportunity, allowing you to charge premium rents while guaranteeing a future sale.


Why lease with option to buy works for high-mortgage properties:

✅ Premium rent pricing - 15-20% above market rates
✅ Large upfront option fee - $10,000-$25,000 immediate cash
✅ 3-year lease commitment - Eliminates vacancy costs and turnover
✅ Guaranteed sale - Locked-in buyer at predetermined price
✅ Cover your mortgage - Turn negative cash flow positive

The High-Mortgage Problem in Phoenix:

Common Scenario:

 

  • Property Value: $450,000
  • Your Mortgage Payment: $2,800/month (7.5% rate, recent purchase)
  • Market Rent: $2,200/month
  • Monthly Loss: -$600/month
  • Annual Loss: -$7,200/year

 

Lease with Option to Buy Solution:


  • Option to Buy Rent: $2,600/month
  • Option Fee: $15,000 upfront
  • Monthly Cash Flow: -$200/month (vs. -$600)
  • First Year Net: +$12,600 (option fee minus negative cash flow)
  • Guaranteed Sale: Property sells in 3 years at predetermined price

How Lease with Option to Buy Works for Owners:

 How Lease with Option to Buy Works for Owners:

 

Step 1: Property Evaluation

  • Mortgage payment analysis - Determine cash flow gap
  • Market rent assessment - Establish baseline pricing
  • Option rent pricing - Calculate premium rent (typically 15-20% above market)
  • Purchase price setting - Lock in sale price for 3 years


Step 2: Marketing Strategy

  • Target option buyers - People wanting to own but can't qualify yet
  • Premium positioning - Market as path to homeownership, not rental
  • Professional presentation - Showcase property's ownership potential
  • Qualified lead generation - Screen for serious purchase intent


Step 3: Tenant-Buyer Selection

  • Credit score requirements - Typically 600+ (improving toward purchase)
  • Income verification - Ability to pay premium rent
  • Option fee capacity - $10,000-$25,000 upfront payment
  • Purchase commitment - Genuine intent to buy in 3 years


Step 4: Agreement Structure

  • 3-year lease term - Eliminates turnover and vacancy
  • Purchase option price - Locked for entire lease period
  • Rent credit allocation - Portion of rent toward future down payment
  • Maintenance responsibilities - Tenant treats property as future home

Financial Benefits for Property Owners: Immediate Cash Flow Improvement:

 

Traditional Rental:

  • Market Rent: $2,200/month
  • Mortgage Payment: $2,800/month
  • Monthly Loss: -$600
  • Annual Loss: -$7,200

Lease with Option to Buy:

  • Option Rent: $2,600/month
  • Mortgage Payment: $2,800/month
  • Monthly Loss: -$200 (67% improvement)
  • Option Fee: $15,000 upfront
  • First Year Net: +$12,600
     

Why Tenants Pay Premium Rents:

🏠 Path to Homeownership

  • Locked purchase price protects against appreciation
  • Rent credits build toward down payment
  • Time to improve credit and financial position
  • Experience homeownership without immediate commitment

🎯 Exclusive Opportunity

  • Limited inventory of lease-option properties
  • Alternative to traditional mortgage qualification
  • Immediate move-in to desired home
  • Control over future housing costs

💰 Investment in Their Future

  • Monthly rent credits toward purchase
  • Option fee applied to down payment
  • Building equity while "renting"
  • Protection from rising home prices

🏠 Property Types Perfect for Lease with Option:

✅ High-Mortgage Properties

  • Recent purchases at 6%+ interest rates
  • Mortgage payments exceeding market rent
  • Properties with negative cash flow
  • Owners needing immediate relief

✅ Appreciation Markets

  • Properties in growing Phoenix neighborhoods
  • Areas with strong future value potential
  • Locations attractive to future homeowners
  • Properties with homeownership appeal

✅ Move-In Ready Homes

  • Properties requiring minimal repairs
  • Homes suitable for immediate occupancy
  • Properties with homeownership features
  • Well-maintained single-family homes

Legal Protections for Property Owners:

 

🛡️ Professional Documentation

  • Lease agreement - Standard 3-year residential lease
  • Option to purchase agreement - Separate legal document
  • Purchase price protection - Locked value regardless of market changes
  • Default provisions - Clear terms if tenant doesn't exercise option

⚖️ Exit Strategies

  • Option exercise - Tenant purchases at predetermined price
  • Option expiration - Tenant moves out, you keep option fee
  • Lease renewal - Extend lease if beneficial to both parties
  • Traditional sale - Market property if tenant doesn't purchase

🏆 Ready to Transform Your High-Mortgage Property?

🏆 Ready to Transform Your High-Mortgage Property?

FREE Lease with Option Analysis!

 Let's calculate how much this strategy can improve your cash flow 

What We'll Cover:


✅ Current cash flow analysis - Calculate your monthly loss 

✅ Option rent pricing - Determine premium rent potential 

✅ Option fee structure - Maximize upfront cash 

✅ Purchase price strategy - Lock in profitable sale price

 ✅ 3-year financial projection - See total benefit vs. traditional rental 

✅ Marketing and tenant placement - Comple

Phoenix, Arizona, United States 85020

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