Lease Option

If a business finds itself in a situation where it would like to rent a building, but likes the building so much they may wish to buy it at a later date, the business should consider a lease option. A lease option can be a great consideration for both the tenant and the landlord. The tenant has the option of trying out the property for set period of time, in which they can decide if they still want to buy the property or not, and the landlord has the option of cashing out without the hassle of listing or marketing the property for sale. Business management guru Phil Thow believes a lease option may be just what the doctor ordered for a business looking to purchase property.

For the buyer, a lease option gives the flexibility of being able to bail out if conditions change and the property is no longer suitable for the business at hand. It also has the benefit of having a fixed purchase price so the company can budget for the eventual purchase of the property. And if it’s a new business, it allows time to build up business credit with financial institutions. These things are not to be taken lightly in terms of planning ability. It is always nice to know future costs and be able to plan accordingly. Phil Thow stresses that good planning skills are what differentiates a great manager form a good one.

For the seller, Phil Thow tells us a lease option is a nice situation because while they are waiting for the seller to make a decision over time, they are also collecting rent. Having their property occupied is of the utmost importance to the seller in order to keep cash flow going. Phil Thow tells us that having a captive audience can be a very good thing for a landlord. The lease purchase option also gives the seller a chance to know the buyer and decide whether they would like to hold the mortgage, or send the seller to a bank or other lending institution.

With the current economic situation, having the option of a lease purchase may be good. In his business teachings, Phil Thow says it’s important to keep all options open when running and growing a business. Each and every decision has some kind of bearing positively or negatively on what direction your business is heading.