How To Find Purchase Lease Option Properties

The rising popularity of serviced apartments attracts guests seeking hotel-like comforts while maintaining their privacy. To stand out among the competition and increase profitability, it’s crucial to enhance your marketing strategies for your multiple properties in town.

Purchase Lease Options (PLOs) offer a means to generate income and equity growth from a property without ownership. It involves renting a property for a defined period and gaining the right, though not the obligation, to purchase it at a pre-agreed price. This strategy is potent, yet many find it challenging to locate PLO opportunities. Here, I’ll outline three effective approaches to assist you in this quest.

How Does Lease Options Work?

A lease option offers potential property buyers the flexibility to rent from an owner without a mandatory purchase at the lease term’s end. Unlike regular lease-purchase agreements, a lease option allows renters to opt out of buying. The property’s price is usually set upfront between renter and owner, aligning with current market value. This can benefit renters by potentially enabling a purchase below market rate. However, exercising the option may involve fees, up to 1% of the property’s sale price, charged by owners.

How to Find Lease Options Properties:

First Strategy: Go online or speak to local estate agents or letting agents

The first strategy for discovering Purchase Lease Options is straightforward. You can explore online platforms or engage with local estate agents and letting agents. Seek out properties listed as both “For Sale” and “For Rent” – those familiar signs you’ve likely noticed. When a property owner employs this dual listing, it essentially conveys, “I intend to sell, but if that’s not viable, I’m open to renting in the interim.”

This aligns precisely with the Purchase Lease Option concept: leasing for a defined period, with the subsequent Right to Buy. Thus, identify properties bearing “For Sale” and “To Let” signs with agents, then approach owners to explore potential collaboration.

Second Strategy: Look for Tired or Retiring Landlords

The alternative approach to discovering Purchase Lease Options involves targeting landlords, particularly those who are fatigued or approaching retirement. An effective way to pinpoint such landlords is by identifying those advertising their properties for rent. Typically, these individuals manage their properties independently, leading them to advertise them as available for rental, even in cases of HMOs where room rentals are showcased on platforms like SpareRoom.co.uk or Gumtree.com.

To begin, navigate online and locate landlords who are advertising their properties for rental purposes. Reach out to them through a text message or email, expressing interest in their property. Subsequently, broach the idea of a guaranteed rental income spanning 3 to 5 years.

Should they express interest, a discussion about their property’s potential unfolds – a concept known as Rent to Rent. Here, you pose a follow-up question: “Would you consider selling the property to me within a 3 to 5-year timeframe if I find it suitable?” Their affirmative response essentially lays the groundwork for an Option agreement. In essence, they agree to lease the property for a predetermined duration, subsequently granting you the right to purchase it. The subsequent step involves negotiating the specific terms of your Purchase Lease Option.

Third Strategy: Writing Direct to Landlords

My preferred method for discovering Purchase Lease Options, the third approach, involves direct communication with landlords. You can execute this in two distinct manners. Firstly, you can identify properties that appear vacant or dilapidated as you pass by. Secondly, you can spot properties that seemingly remain unoccupied. Subsequently, you can access the Land Registry to ascertain ownership by procuring the Title Deeds, a process necessitating a nominal payment of three pounds. With ownership details in hand, you can write to the property owner’s residential address, inquiring whether they’re interested in renting out or potentially selling their vacant property. Responses will vary; some may express interest while others may not.

Another avenue for reaching out to landlords through written communication is to liaise with the HMO Licensing Department of your local council. This can provide you with a compilation of licensed HMO properties within the vicinity. Subsequently, you can send letters, not to the actual property addresses, but more ideally to the homeowners’ residences.