The innovative way to start investing in real estate is to use the leasing option. The biggest advantage of using leasing to choose to invest in real estate is control. This investment method basically gives investors the right to own, control and obtain the profits of the property without owning the property.
A lease option contract is a combination of two documents.
Part of the lease is when the landlord agrees to let you rent the property when you pay the rent within the specified time. During the lease period, the landlord cannot raise the rent, rent it to anyone or sell it to others.
Part of the contract option represents your right to purchase the property at a specific price in the future. If you decide to exercise the purchase option, the owner must sell it at a negotiated price. The option portion of the contract requires the seller to sell during the option period, but does not force him to buy. You can only pay the agreed rent during the rental period.
When the lease option agreement is written and structured, it can bring significant benefits and benefits to investors. If the lease option includes a “sublease”, the investor can generate a positive cash flow by leasing the property to the tenant during the lease period, or can lease the property to the tenant – the buyer receives positive cash flow and future earnings. If the lease option involves a “transfer right,” the investor can transfer the contract to another buyer for a quick profit.
Thailand Real Estate leasing options are a flexible, low-risk, highly leveraged investment method that can be implemented with little or no capital.
This is very useful because you can control a property and enjoy it right away, even if you don’t have it yet. The fact that you are not the owner also limits your personal and personal responsibilities. Will you get the name of the property only if you decide to purchase a property that uses the “purchase option”?
Little or no money
The cost of signing a lease option contract between a Thailand Real Estate investor and a landlord requires little or no funding, as investors and homeowners can negotiate completely. In addition, the option rate can be built in a variety of ways. It can be paid in installments, instalments or other agreements acceptable between the parties. The option rate can be as low as $1.00.
In order to ensure that the property is purchased in the future, the rental buyer usually pays a non-refundable option fee, which is about 2% to 5% of the future purchase negotiated by the seller. Depending on how you write and the structure of the lease option agreement, investors may use the lessee-buyer’s currency exchange rate option to pay any taxes on the homeowner’s options.
Lease options Real estate investment is a flexible investment method because the terms of the agreement, such as payment amount, payment date, fee, interest rate, interest only, payment, purchase price and other terms are negotiated by the seller and the buyer. The responsibilities of both parties can also be negotiated. For example, if an investor does not want to be the owner, you can specify in the lease option agreement that the lessee – the buyer will be responsible for all minor maintenance and repairs, and the original seller is still responsible for any significant contract.
It has a lower financial risk because if the value of the property is not enough to make a profit, you have the right to change your mind and let the purchase option expire. Even if your tenant – the buyer decides not to buy the property, he can benefit from the renter – the buyer’s monthly cash flow payment and the original non-refundable option rate.