The exit strategy you choose to sell your house can dramatically impact your real estate investment returns. Beyond traditional selling, lease options provide a highly profitable alternative that savvy Chicago investors are increasingly utilizing. With this approach, potential buyers essentially test-drive homeownership for one to three years, after which they can either purchase the property or walk away—allowing you to keep the initial option fee collected upfront as a down payment.
Similar to a rental arrangement, you’ll maintain ownership while collecting payments. The difference? These tenants have significant skin in the game, as they’re essentially rehearsing for homeownership. They willingly pay premium rates for the opportunity to experience homeowner living while addressing credit issues or building their down payment savings. With qualified tenants and a carefully structured agreement, many Chicago property owners discover the substantial benefits of this strategy and begin specifically targeting lease option investments. Continue reading to learn how lease options can help you sell your rental property in Chicago.
Asking Price
When using a lease option to sell your house in Chicago, you maintain control over setting the future sales price. This price is typically established above current market value to account for anticipated appreciation during the contract term. While you assume the risk of values potentially increasing more than expected, the tenant accepts the possibility that values might decline—creating a balanced arrangement that can work particularly well in Chicago’s older neighborhoods.
Option Fee
Implementing a lease option to sell your house in Chicago means collecting an upfront, typically non-refundable option fee ranging from one to five percent of the sales price—though fees up to twenty percent aren’t uncommon in desirable Chicago neighborhoods. With the national median listing price hovering around $450,000 as of May 2022, a 5 percent fee would yield $22,500, which would later apply toward the purchase price if the tenant exercises their option.
Tenants Maintain Your Property
While you’ll retain the property title and remain responsible for taxes and insurance, most other responsibilities shift to the tenant when using a lease option to sell your house in Chicago. This arrangement is particularly beneficial for properties with potential city code violations or maintenance concerns, as tenants typically assume the financial obligations for property maintenance and even necessary repairs—a significant advantage for owners of older Chicago homes.
Above Market Rent
You’ll generate above-market rental income when using a lease option to sell your house in Chicago; this additional amount is called the rent premium. Upon exercising their purchase option, buyers would deduct these premium payments from the final sales price. However, if they decide not to purchase, you retain these additional funds—providing you with enhanced cash flow throughout the agreement period.
Speak with one of our experienced bilingual investment specialists at CVG Properties LLC today about your property, with no obligation. At CVG Properties LLC, we believe in complete transparency—we want you to feel confident you’ve made the best decision long after closing. That’s why we’ll provide a detailed comparison between traditional listing numbers, lease option potential, and even make you a direct cash offer to purchase your property as-is. At CVG Properties LLC, we provide clear, straightforward explanations of all calculations so you can make an informed decision about the best way to sell your Chicago house, especially if it has unique challenges like code violations.
Ready to discover the mutually beneficial advantages of using a lease option to sell your house in Chicago, particularly if you’re facing time constraints or property issues? Call CVG Properties LLC at 312-625-6506.