Lease Options May Be The Way To Go

                                 PGA West, LA Quinta CA

 Just a couple of years ago I wouldn't have thought I'd live to see the words "lease option" uttered again, at least not in regards to the Palm Springs Real Estate Market. But as I've said before, the only rule is there is no rule these days. And lease options are sprouting up all over the valley like mushrooms in a meadow after a thunderstorm.

If you've never considered an option perhaps this is the time to ask your Palm Springs Real Estate Broker if it might be right for you. Typically the scenario is that you invest a non-refundable sum of perhaps ten thousand dollars or more, alongside lease monies, for a year or more while you prepare to finance the home. Some folks consider the surrendered payment a small price to pay if the area or home turns out not to be what they'd wished for. Others like the time to save a bit more and watch the market and the interest rates. And still others - those more risk inclined - like to tie up a property in the gamble that by the time they exercise the option, considerable equity will have been gained since the price agreement.  That's because option agreements usually lock in the eventual sales price at the start of the lease, or at least include a schedule of value increase. For instance, every year the option is not exercised the price changes.

For owners it's a way to get some extra income off an otherwise dormant property, and if you're convinced that the market is stale for the time being, a price-lock 12 or 24 months down the line is something you can plan for.

And homes aren't the only properties available on options these days. I recently met a young man who'd purchased a seedy motel on an option, fixed it up over the course of a couple years, and then sold it at a healthy profit in a double escrow (options usually allow for that). The older seller was thrilled, at 84 he was in no shape to refurbish anything and there was very little market for old motels. But there was a market for restored mid-century inns. So it was win-win all around.

Now the popular snowbird refuge is a realized dream for the couple from Seattle who bought it, the young man is on his way to becoming a real estate mogul, and the elderly gentleman is retired by his pool, three loving mutts and a cold one by his side.