This type of marketing focuses on young couples who would have purchased a home but are unwilling or unable to avail a home mortgage. A landlord, who owns an apartment that is turning out to be a loss-making proposition due to a large number of vacancies, can try selling off individual units as condos by offering a rental property purchase plan. This plan involves the tenant paying an option fee to acquire the right to buy the condo at an agreed upon price at some point of time in future. The option fee, that is paid to the lessor is usually 1 to 5 percent of the price of the condominium, and the term of the contact is around 2 years. The landlord, or in this case the lessor, receives regular rent from the tenant of which 25 to 33 percent goes towards down payment. At the end of 2 years, the lessee/tenant may exercise the option to buy the condo. The odds in favor of the lessee are slim considering that the housing market is bound to pick up in 2 years' time. The demand for single family homes will increase while the demand for condos will fall thereby making the pre-determined price of the condo seem inflated as compared to its actual market value. The landlord has a good chance of retaining possession of the condo while receiving rent from the potential lessee. In other words, he can have his cake and eat it too.
Irvine Homes
