Should You Sell With a Lease Purchase or Lease Option?

This is a question I get all the time.

Personally, from a psychological standpoint, I would prefer to promote lease purchases because it suggests that the buyers are committed to buying the home.

The unfortunate part about inexperience with real estate law is that most people don't understand that a standard lease purchase can convey equitable interest in a property to the point that if you get a wise guy tenant who knows the law, he can default and require you to foreclose on him first and then evict him (even though title never changed hands).

This process can last longer than 18 months in the state of Georgia, all the while without you receiving monthly lease payments. (Believe it or not this happened to a friend of mine.)

A straight lease does not convey equitable interest and the eviction process can be accelerated.

This is why we promote Lease Options for both our sellers and our own investments. The bottom line is that the risk of the Lease Purchase is not worth the psychological advantage.