Lease Options CE, defaulting and taxes

(My Original Blog Post: http://ping.fm/REJJd)
Lease Option Continuing Education- If you want to learn more about lease options I would recommend following the teachings of Wendy Patton, Peter Conti and David Finkel. Those were may favorites and they have many audios and books available on the market and amazon.   David Finkel and Peter Conti-Buying Real Estate Without Cash or Credit and Making Big Money Investing in Real Estate: Without Tenants, Banks, or Rehab Projects.  For Wendy Patton Investing in Real Estate With Lease Options and "Subject-To" Deals : Powerful Strategies for Getting More When You Sell, and Paying Less When You Buy.  These books will get you started on your way to buying many lease option properties and will cover in more detail how they work and how to avoid pitfalls and well as usual tips and tricks.  I have been to Wendy Patton seminars which I've enjoyed.

What if you default on payments- If the tenant were to default on the payments of the property the landlord or manager of the property will likely treat the situation like any other rental lease situations.  If the lease has been violated for lack of payments or any other reason then the landlord or manager will likely file an eviction and go through the court process which may only take 3-4 weeks to evict the tenant. The tenant can try to catch up the payments, make arrangements with the property manager or landlord or they may simply need to move out gracefully.  If the tenants want more time in case they would miss a payment maybe they should put more money down and buy a contract for deed property. We have a blog post about contract for deeds on this blog.

How are taxes handled with Lease Options-With lease options as long as it's not a purchase, the seller is typically paying the property taxes and making the mortgage payments, so the landlord/seller is getting the full tax benefits. Which include depreciation of the property, interest write-offs, and property tax write-offs.  The seller may get some of these write-offs because it's considered an investment rental property whereas before it was probably a homesteaded property.  On a contract for deed a buyer would get the benefits of these tax breaks, so it's something for the seller and buyer to both consider when decided on a rent to own vs. a contract for deed.