The UK Lease Options in a Nutshell

The immigration trend has been on the rise in Hong Kong for the past years. The United Kingdom has been the best bet for most people. There are no legal restrictions on expatriates for owning properties in the UK, and there are various ways to get yourself a property in the UK. Most people would tell you to get into a lease option, but what is a lease option agreement?

What is it?

A lease option is an agreement that you buy a property now, but you pay for it some time down the line as agreed between you and the seller. That could be years or even decades! When the time comes due, you have the option to buy it, not the obligation. Unlike a lease purchase agreement, A lease option agreement obligates the seller to sell solely.

Why a Lease Option?

The genius of a lease option lies in the duration between the time you buy a property and pay for it. Properties double in values every ten years on average. Let’s say if you buy a property today, and pay for it after ten years. By the time you have to pay for it, it has already doubled in value. At the end of the ten years, you could choose to buy it or not. And if you do, the seller must sell it to you, and you are buying it for up to 50% below its market value.

Not only are you gaining from the appreciation of the property, but you are also benefiting from the cash flow. You can generate cash flows during those then years as you have become the landlord of the property. You could be an investor and rent your property to a renter to cover up your price discussed in the lease option agreement. You will be making money when the monthly rent you receive is more than the monthly cost of the lease option agreement.

A lease option agreement is hugely beneficial to those who have no money or those who do not want to spend that much money at the moment. It is a way for anyone to own a property. You could be bankrupt and enter a lease option agreement! You could even earn passive income by renting and outsourcing various lease options.

What if you do not want to but the property?

You can choose to sell your options to other tenant buyers. Let’s say you are at the end of your ten-year agreement and do not wish to buy it. You managed to find a tenant buyer. As a result, you can sell your options to the buyer under your existing purchase options. The terms with your seller would remain unchanged. Selling an option is hugely rewarding as the value you offer to your buyers can be way above your costs yet below the market price. It is considered one of the money-making tools of property investors.

You could also choose to give the property back to the seller if you do not seek to exercise or sell your options. Yes, you would have to pay your seller money as discussed in the agreement. But on the flip side, you have earned money as a renter in the meantime. But since both parties are gaining money, it is a win-win situation!

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