Utah Real Estate Market
There is a huge surplus of Real Estate for Sale in Utah. The population of Utah is still growing, but with the current economic situation less people are able and willing to buy Utah Real Estate. Some people aren't buying because it is now harder to obtain mortgage financing. Others aren't buying because they simply fear that if they buy, the house will actually depreciate and go down in value. As long as their are more homes on the market than able willing buyers, prices will decline. One way to find a house to live in, and to help get rid of many of the excess listings is with a lease option.
What is a Lease with an Option to Buy?
A lease with an option to buy is just like it sounds. It is a lease agreement, rental agreement, or whatever you want where the tennant has the "option" to buy the home after a designated period time.
Lease options in Utah include "option money" - a nonrefundable payment put in a trust account that will be returned to the tennant if they buy the house or given to the seller if they don't exercise the option. They also include a security deposit that will be completely refunded if the house is purchased, or left to the sellers discretion if the option is not exercised.
A portion of the rent in lease options can also be applied towards the down payment if the option is excercised. If it isn't exercised, then the landlord just keeps that money as the normal rent.
Why You Should Consider a Lease Option
It is a tough selling market in Utah right now. Some homes that are priced below market value are still taking months to sell. People still need homes to live in, and many will refuse to live in an apartment complex. Finding a house to rent is darn near impossible in many parts of Utah.
By considering a lease option, you can have most (if not all) of your mortgage payment paid for and have a likely buyer in a year or so. Your tennant will also likely take better care of the property because in their mind it is and likely will be their home.
Renting with a lease option also usually commands more rent money than a regular rental. It does require being a landlord, but if your house is just going to sit on the market vacant, it might be better to atleast have the mortgage paid for with a lease option.
