We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.


Lease Option

Categories: Real Estate

See: Lease.

Think: rent-to-own, only instead of furniture, we have an office building.

You loved leasing the place for $5k a month these last 3 years. But now you want to own it. Business has been good and you have the cash. Luckily, your crackerjack lawyer inserted a clause before you signed the original lease that you'd be able to buy the office building at a cap rate of 10-ish...and you preset the purchase price at $400,000. You were leasing with an option to buy. And now you'll execute that option, write a check to the owner for 400 large, and become the proud new owner...of a lot of management headache you didn't realize the landlord used to handle for you.

Find other enlightening terms in Shmoop Finance Genius Bar(f)