What is a lease option?

A lease option is a specific agreement that provides a tenant with the right to purchase the property they are leasing at a predetermined price within a set timeframe. This arrangement combines elements of both leasing and real estate purchasing, allowing tenants to potentially transition from renters to homeowners while securing a price ahead of time. The lease option often serves as a strategic opportunity for tenants who may not currently have the financial means to buy but anticipate being able to do so in the future.

The mechanisms surrounding the lease option can vary, but they typically include an initial option fee and stipulations regarding how long the tenant can exercise the purchase option. This structure offers a unique combination of flexibility for the tenant and assurance for the landlord regarding a potential future sale. The other options presented don't accurately encompass the comprehensive nature of a lease option agreement, following a more general or unrelated concept instead.