What are the advantages of doing a lease-option when you are the home seller. Many advantages if you are the buyer, but am not sure if there are any for sellers.

A lot of investors like the cash flow of receiving the monthly payments on rentals. With a lease with option to buy, they basically are charging a premium monthly rental fee and throwing some of the money into a deposit (let's say 25% for this example) for when they do buy the house. So let's say it's a two year option, the rent is $1500 per month (normal rent in the area is $1100-1200 per month) and 25% of it goes towards a deposit. After two years there are $9000 saved for a deposit to purchase your house. Let's say your house when this lease was originally signed could be purchased for $250,000 if they were qualified for a legit mortgage or paid cash. Well with them leasing from you with the option you make an agreement to sell the house to them for $270,000 total. Two years are up they have a $9000 deposit and can qualify for a mortgage, now they can buy your house with the balance for them being $261,000.

Basically the owner made $20,000 more on the house than he would have made normally and he probably saved another $15,000 or so because he probably didn't use a real estate agent. He made an extra $35,000 going this way if you look at it this way, but it was not a quick sale.

Also the owner can still evict the tenant if they don't pay. If the tenant doesn't exercise their option to buy after the specified period of time, the landlord doesn't have to sell them the house, they can just stay on as tenants and of course you keep all the extra money they paid you.

A lot of investors don't like doing this because they say it takes away their property (some like to hold and keep rental income coming) and others don't deal with rentals at all because they say it takes away too much out of their funds, rather than flipping and re-investing constantly.

There are several ways of structuring this deal, this is just one example.

Another example is taking a down payment at the beginning of the contract.

You could use the extra money as a down payment or you can use it as a fee to be able to exercise the option to buy.