Learn Some Key Technical Terms in Rent-To-Own Program

Initial Option

Generally, Option is the right to do something, while Option Price is the amount Tenant-Buyer pays to Property Owner or Real Estate Investor for the right.

Initial Option is the Option price pay by the Tenant-Buyer to the property owner for the right to purchase the property at a certain price in the future.

Monthly Option

Some Real Estate Investors or Property Owner may request for monthly option. This is an amount Tenant-Buyer pay monthly to Real Estate Investors/Property Owner to keep the option right alive. Its usually an  amount less than the Initial Option

Last Option

Some RTO agreement might request for last option. This is the option you pay when Tenant-Buyer is exercising the right to purchase the property

Option Lease Agreement

This is the agreement executed between the Tenant Buyer and Property Owner/Real Estate Investor detailing the terms and conditions of the lease during the Tenanting period. It specify the responsibility of the Tenant-Buyer and Property Owner including the cost of repairs and maintaining the property during the lease period

Option to Purchase Agreement

This is the agreement detailing the terms and condition regarding the purchasing of the property. It contains the agreed purchase price, last option if any etc.

Month Rent

This is the monthly rent payable for occupying the property during the lease period. It is usually covered in the option lease agreement

Property Price

This is the negotiated price between the Tenant-Buyer and the property owner. Its usually stated in the Option to Purchase agreement

 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s