The exit strategy you choose to sell your house can significantly impact the returns on your real estate investment. A highly profitable alternative to selling your house outright is a lease option, which allows you to potentially earn a higher return on the sale. At the end of the lease term, usually one to three years, the tenant has the option to buy the home or walk away, while you retain the initial option fee collected upfront as a down payment.

Similar to having tenants, you’ll be renting out your property. However, these tenants have more at stake than average renters, as they are essentially test-driving ownership of the property. These tenants are willing to pay extra for the opportunity to experience homeownership while improving their credit or saving for a down payment on the property. With the right tenants and a well-crafted lease option agreement, many investors come to appreciate the benefits of this arrangement and start investing with a lease option strategy in mind. So read on as we explore using a lease option to sell your house in Dallas-Fort Worth.

Asking Price

When you use a lease option to sell your house in Dallas-Fort Worth, you’re in control and can set the sales price for the property now. Typically, this price is set above the current market value to account for expected appreciation over the contract term. While you face the risk of a sudden increase in property values, the tenant takes on the risk that property values may decline.

Option Fee

Using a lease option to sell your house in Dallas-Fort Worth means you’ll collect an initial option fee, typically ranging from one to five percent of the sales price, though fees as high as twenty percent are not uncommon. This fee is usually non-refundable. With the median listing price for active listings in Texas being around $400,000 as of 2024, a 5 percent option fee would be $20,000, which would be applied towards the purchase if the tenant exercises the option.

Tenants Maintain Your Property

While you’ll retain the title and be responsible for taxes and insurance, all other responsibilities will fall to the tenant when you use a lease option to sell your house in Dallas-Fort Worth. For instance, tenants typically handle the financial responsibilities of maintaining the home and even making repairs.

Above Market Rent

By using a lease option to sell your house in Dallas-Fort Worth, you can earn above-average rental income; this additional amount is known as the rent premium. If the buyers exercise their option to purchase, the total rent premium paid during the contract term is deducted from the sales price. If the purchase does not occur, you retain these funds.

Talk to one of our highly experienced professional home buyers at TX Home Buying Pros today about your property, with no obligation. At TX Home Buying Pros, we want you to feel confident that you’ve made the best deal and continue to feel good about working with us long after closing. That’s why we’ll compare the numbers of a traditional listing vs. the lease option method and even make you an offer to buy your property directly, as-is, for cash. We’re fully transparent, providing detailed explanations of each number in our calculations so you can make an informed decision about the best way to sell your Dallas-Fort Worth house.

Ready to learn more about the win-win advantages for sellers of using a lease option to sell your house in Dallas-Fort Worth? Call TX Home Buying Pros at (214) 296-2343.