By - Leah Njeri
Staff Writer at South Florida Investors

It seems like most investors would like to get an REO (Real Estate Owned or Bank Owned) under a lease option agreement.  But before considering the a rent to own or lease option, it is important to first understand how it really works. It is also advisable to check out who benefits and any fallback procedures in case issues arise. In the case of lease option a homeowner would get to rent the property at a cost that is slightly more than the market rate.  Before they can even move in to the house, they need to have agreed terms.  This includes the date they intend to fully purchase the house and at what price.   This period of course varies greatly and would depend on your agreement level with the owner of the property.

Today, there has been the development of the real estate leasing options. This is used by large estate investors to find a way in which they can use the rent to own platform before they can gain full ownership of the property. Many of the investors today are seeking real estate lease options for bank owned properties, but unfortunately we could not find one bank that would offer this kind of arrangement at this time.  The main reason why the investors are seeking to invest in properties owned by banks is because the banks selling out their property at rates that are below the actual market value.  Most banks again do not allow for the lease option. This state is not expected to change any time soon.  Many banks all over the world have started renting out their houses and selling them at later dates. Most of them have however decided to make use of property managers rather than using the lease option which is preferred by most investors.  The main reason as to why the banks have been reluctant in adopting the real estate lease option is because they do not have the right staff for the job.  They argue that they do not have the right staffing to handle property issues.

On the other hand, the number of investors seeking property ownership is overwhelming and cannot be satisfied by the low workforce. It still remains that a cash purchase is the only sure way for you as a real estate investor to gain real estate ownership. This might not be good news for a beginner investor mainly citing the issue of lack of financing.  Depending on the investor location, there are many of these properties that are selling at relatively low market values. This just explains why a cash deal can be a good option towards property ownership.  If at all you do not have the necessary cash, you can acquire the property as a partnership.  After purchasing the property, you can now increase your business profitability by adopting the property lease option.  Maximization of cash flow is truly in the offing because there are many people out there who are seeking to own property but cannot get the right financing.