A Lease Purchase is a financial arrangement that combines elements of a traditional lease with the option of purchasing the property at the end of the lease term or during a specified period within the lease term.
Typically, the tenant (or lessee) agrees to lease the property for a certain period at an agreed-upon price, with a portion of the monthly lease payment sometimes set aside to contribute towards the purchase price of the property. The tenant usually has the right, but not the obligation, to buy the property at a predetermined price within a set time frame.
A Lease Purchase can be beneficial for both parties. The seller (or lessor) has the potential to sell the property to a motivated buyer while receiving regular payments. The buyer, on the other hand, can test out the property before committing to purchase and may have a chance to build equity in the meantime.
It’s important to note that Lease Purchase agreements can be complex, and the exact terms can vary widely. They may involve various conditions, obligations, and rights that are unique to each arrangement, so it’s advisable to consult with legal and real estate professionals to fully understand the particular details of any Lease Purchase agreement.