Real Estate Investor Articles

In my last article, I shared with you how lease options and buying a property "subject to" were similar. While the mechanics of how they are implemented is very different, both offer you the ability to control a property--without getting a new loan--and, if you market and structure it correctly, can allow you to profit both on an up front deposit, on-going monthly cash flow and a large back end pay day when you sell the property.

So, what is different between using a lease with an option to buy and buying a property "subject to" the existing financing?

First, when buying a house "subject to" you are actually getting the deed to the house which will make you the owner of the house. This may give you

Follow up:

tax benefits that you do not get with a lease option-check with you tax adviser for details of how that might apply to your unique tax situation.

Second, with a lease and an option to buy you have the option to buy, but you are not obligated to buy. That's different than buying a house "subject to" where you are buying it at the beginning and need to be committed to following through with the deal.

So, it should be a bit clearer that you have more options with a lease option, but lose some potential benefits.

Until my next post,

James