Using a Lease Option to Sell Your Rental Property in Massachusetts
Choosing the right exit strategy to sell your Massachusetts house is crucial if you want to maximize the return on your real estate investment. While a traditional home sale may seem like the easiest route, there’s a potentially more profitable method savvy investors are using—lease options. This creative strategy allows you to generate income now and still potentially sell the property later, often at a higher price.
With a lease option, you agree to rent the home to a tenant-buyer who has the option (but not the obligation) to purchase the property at the end of a specified lease term—usually one to three years. During this time, you receive an upfront option fee and monthly rent, which often includes a rent premium applied toward the future purchase. Let’s explore how a lease option can benefit you when selling a rental property in Massachusetts.
Set a Strategic Asking Price
One of the key benefits of using a lease option is that you’re in full control of the purchase price. When selling your house in Massachusetts this way, you can set the sales price based on projected market appreciation. This means you’re often able to set a slightly above-market price to account for rising home values over the lease term. While there’s always some risk if the market dips, the potential upside is significant.
Collect a Non-Refundable Option Fee
A lease option agreement allows you to earn non-refundable income upfront. Typically ranging from 1% to 5% of the agreed-upon sales price, the option fee is paid by the tenant-buyer in exchange for the right to purchase the property in the future. In some cases, these fees can be even higher—up to 20% depending on the market and the agreement. This amount can be applied toward the final purchase if the buyer chooses to exercise the option, giving them added motivation to follow through.
Reduce Your Maintenance Burden
Another major advantage of lease options is that tenants typically take on more responsibility for property maintenance. Since they plan to eventually own the home, tenant-buyers are more likely to treat the property with care and handle minor repairs themselves. While you’ll still need to cover insurance and property taxes, this arrangement significantly reduces your day-to-day landlord duties—and your maintenance expenses.
Earn Above-Market Rent with a Premium
Lease options allow landlords in Massachusetts to charge above-market rent, commonly known as a rent premium. A portion of this premium can be credited toward the purchase price if the tenant buys the property. If the buyer doesn’t exercise the option, you retain the rent premium in full. Either way, this additional income boosts your monthly cash flow during the lease term.
Attract Motivated Tenant-Buyers
Tenants entering lease option agreements are often highly motivated future homeowners who need time to improve their credit, increase savings, or stabilize their income before buying. These renters are more likely to pay on time, care for the property, and follow through with their option to purchase—reducing the likelihood of vacancy or tenant turnover.
Is a Lease Option Right for Your Massachusetts Property?
Using a lease option to sell your house in Massachusetts can be a smart, flexible strategy for maximizing profit, especially if your property needs some updates or you’re not in a rush to sell. By collecting upfront fees, charging rent premiums, and reducing maintenance costs, you’ll be in a strong position to optimize your returns over time.
If you’re exploring your selling options and want expert guidance, talk to one of our experienced professional home buyers at Revival Homebuyers today. There’s no obligation—just honest advice. At Revival Homebuyers, we’ll help you compare the pros and cons of a traditional listing vs. a lease option, and we can even make you a cash offer to buy your house as-is.
We’re committed to full transparency, walking you through every number and helping you make an informed decision that fits your unique goals. Whether you want to sell fast or maximize profits over time, Revival Homebuyers is here to help you sell your Massachusetts house with confidence.
Ready to learn more about the win-win advantages for sellers of using a lease option to sell your house in Massachusetts? Call Revival Homebuyers at (413) 351-9294.