The property industry today is vastly different from the property industry that we knew just a few short years ago. Things ebb and flow, they grow and shift, they evolve and change – and from the point of view of investors, they become more lucrative. From time to time, new concepts come to light that push the property industry forward. And also, from time to time, major players in the industry come up with something huge that completely changes the game.
One such person is Vincent Wong. Vincent is an experienced and dedicated player in the property industry and he brings more than 20 years of experience to the table – and a massive social media following to boot! It isn’t so much of Vincent’s experience and his charming internet personality that we’re talking about. Instead, it’s a novel concept that he helped to pioneer within the property industry, and due to his strong social media following, he’s been able to take that strategy to the UK, Malaysia, and even the Netherlands.
What’s Vincent’s secret? A little concept known as “lease options.”
What Are Lease Options?
Before we define what lease options are and how they’re used, we need to gain a better understanding of the typical challenges that hold people back from buying a home. For most people, they either a.) don’t have enough money for a down payment, or b.) they aren’t able to find a lender willing to support an income multiple to cover the full cost of a property. In those instances, getting a mortgage can be quite difficult.
This is precisely where lease options come into play. With this novel concept, investors will take over the current mortgage payments of a property owner. From there, they will then offer a lease option, where they’ll rent that property at a price that comes in higher than the monthly payments required for their mortgage. This concept can become quite lucrative for investors, and quite beneficial for leasers.
“The real purpose of lease options are to help people get into homes who otherwise would really struggle to make the financials work. They might be paying a bit more than a typical mortgage payment for a property with a similar valuation, but they don’t have to worry about making a deposit or applying for a mortgage. For this reason alone, lease options have become quite desirable in the market, and it makes sense,” says Wong.
“On the other hand, investors are falling in love with this process because it gives them a chance to generate pretty hefty returns each month – all without actually purchasing a property. It’s an exciting time for the property industry, and it’s interesting to see this concept really take off as it has around the world.”