jaydub 0 Report post Posted August 19, 2004 Hello everybody,I'm sure everyone has a different opinion or formula, but when you are willing to extend a lease to a good tenant that is not quite able to excercise their option yet, how much option consideration do you normally require the 2nd time around?Thank you for your time Share this post Link to post Share on other sites
Mr.B 0 Report post Posted August 19, 2004 Are you making anything on the Monthly Spread? If so and they are good tenants maybe nothing. Or prehaps you could just ask them how much they could deposit on the new option towards purchase price. You maybe surprised on what they come up with. If they can't come up with anything ask if they could afford an extra 100 dollars a month and increase your monthly cash flow. Just some idears that might work. ~Mr.B Share this post Link to post Share on other sites
MichaelC 160 Report post Posted August 19, 2004 Good question, but one that I have no definite "formula" for. My general rule of thumb is to try for additional option consideration in an amount equal to half the orginal option money paid. Of course, there are other factors at play here. For example, the tenant/buyers themselves. Have they been really good? Do I want to risk losing them or am I happy to see them leave? Local market conditions? Is there a ready pool of available tenant/buyers, or am I looking at an extended vacancy if these folks vacate?And what about the specific property? Is it a showpiece in a desirable neighborhood? Or something that was originally difficult to move because of the style/location, and will be probably be so again? All the above factor in to what you can do when an option is to be extended.Finally, have the local market conditions changed during the past year? Can you increase the rent or the purchase price over the existing terms? Share this post Link to post Share on other sites
