What is a lease option?

A lease option is indeed defined as a contract allowing the tenant to purchase the property after a specified rental period. This arrangement combines elements of leasing and purchasing. The tenant agrees to pay rent for a certain period, during which they may also have the option to buy the property at a predetermined price. This type of agreement can be beneficial for both landlords and tenants; it provides tenants an opportunity to secure a future purchase while giving landlords potential buyers for their property.

Typically, a lease option includes terms such as the duration of the rental period, the price at which the property can be purchased, and other relevant conditions. It grants the tenant the right, but not the obligation, to buy the property at the end of the lease term, allowing them to decide based on their financial situation or changes in the housing market. This structure is useful for individuals who may not currently have sufficient funds for a down payment or those who want to "test out" living in a property before fully committing to a purchase.