Hello people
I’m a bit lost in trying to established the difference between lease option and a wrap
Pls can some tell me what are the best thing to be looking out for when you are buying your wrap and a lease option .Finally when I do a wrap or lease option what criteria should I be looking for from the person who I will be giving it to
Than you
DUe,
One is a contract to purchase on terms, with the vendor setting the terms (usually to suit the purchasers ability to pay)and at the end of the term, or if the purchaser elects to refinance before the end of the term, the title passes to the purchaser.The other is a rental agreement or a lease as administered by the residential tenancies act for your state, with an OPTION to purchase the property after a predetermined time and for a predetermined price.
The purchaser has the option to purchase or not purchase, and pays a fee ( option fee) for this right, as well as an ongoing option fee in monthly installments which is credited to the purchase price if the purchaser elects to exercise the option.
If the purchaser elects not to exercise the option, then it expires and the purchaser forfeits the option fees that were paid towards the purchase price.
They are different in so far as one is a contract to purchase and the other is a tenancy lease with an option to purchase.
When you use one over the other, is dependent on the purchaser or tenant, as to what they prefer ( depending on who you are targetting) and on the laws in your state ( wraps are illegal in SA, and require a Credit Providers Licence in WA )
KP
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