Lease to own can be a very lucrative type of property investment, how it works is that you purchase a property with the intention to lease it out to someone.
who might have aspirations of owning their own home but for whatever reason might not be able to secure a loan.
What then happens is that you sign a contractual agreement with them where there is a predetermined rent and then there is an amount added to this rental amount which will be accumulated so as to assist them to be able to build up the deposit for the purchase of the property every month for a stipulated period of time, typically two years.
These types of tenants will very often be more caring for your property and more willing to keep it in good condition while they are staying there as they have aspirations of someday owning the property and it is for this reason that your maintenance costs will tend to be a lot lower than what they would have been with a regular tenant.
At the end of the two years, or whatever the stipulated time was that was agreed upon, the tenant then has the chance to decide whether they want to still buy the property or not, if they decide to do so, all the additional money which they paid on a monthly basis will go towards their deposit, however, if they decide not to buy, that money will come to you.
So as you can see this can prove to be a very profitable business, no matter what the tenant decides to do. However this type of property investment deal requires you to do your homework and truly understand the workings of such a contract, it is my opinion that you must really take the time to invest in yourself before even considering setting up such a contract as there are many aspects of this type of contract which you need to be aware of.
Consider looking into property investment instructional DVD sets so as to be able to make a well calculated and informed decision before making the decision to make such an investment, the more you understand what it is that you are doing, the less likely it becomes that you will make costly decisions.
Article Source: http://EzineArticles.com/3875041