rent/lease with option to buy

When I lived in FL i rented a townhouse with an option to buy. I locked in the price and actually wrote a purchase contract to buy the home at the same time I signed the lease to rent it. I got 50% credit towards equity for rent and when I went to buy it I knew I was moving out west so I just flipped it and happened to sell it for 40K over what I had agreed to buy it for. The RE market was a lot better a few years ago so not sure if that would happen these days.

As a seller I would give the option to buy at a set price but not at today's value. I'd figure out what you want out of it - sell in 2 yrs for 20% more than today's value and give rent credit as an incentive. You should also make the option to buy unassignable.

As a buy buyer I'd want to lock the price in as cheap as possible, get rent credit towards equity and plan on selling it if i chose not to buy it.

What they said. I also dont think its a good time to lease with option. Prices of homes are falling arent they?

I would be the seller in this instance. It is for a friend, so I want to be fair, but would also like to turn a small profit.

I guess I could set it up so it would be fair market value or 20% over current cost (at time of lease) whichever is greater.

Not everywhere.

If it is for a friend sit down with them and agree on a certified appraiser together and go by the appraisal price at time of sale. You could also add in a clause that says if the price is not at or above X dollars that the sale does not occur. Keep in mind that if the selling price is higher than the appraised price it may make obtaining a mortgage very difficult.

Yeah, already thought about that . . . figured I could carry the paper on the overage if need be.

But yeah, a lawyer will have to be brought in for sure, just wanted a rough idea how it normally works since it is water I have never dove in before.