As the sub-prime lending mess is unfolding currently here in the United States, people are loosing their homes to foreclosure at record levels. Where are all these people going to live? The quick answer is that they will most likely become renters. However, a couple years down the road when the market has adjusted and interest rates drop again, many will look to purchase another home to live in. And, one of the best ways they can do it is through a lease option purchase.

A lease option purchase is one where you as the property owner find a high-quality, long-term tenant who is interested in the right to purchase your home down the road in a couple years. Maybe today the tenant is strapped for cash, has bad credit, etc... but in just a couple years they will be able to qualify for traditional financing. In this case when they want to buy, lease option is a good option for them to consider.

When you set up your lease option purchase contract it is essential that you believe that the tenant will be able to obtain the necessary financing in the time specified in the contract. Morally, you should not lease option to someone who you do not think will ever actually purchase the home. While you may make some money on the deal, you will only be hurting their lives and not helping them out at all.

In a lease option purchase, you can stipulate that the tenant is responsible for any repairs and changes to the property during the time they live there, in exchange for a higher credit each month towards their down payment on your property. This removes you from being the "landlord" and places you in a position where each month you simply have to cash their check as a mortgage holder would. And, at the same time, you are giving someone a chance to own a home in the near future which they simply cannot purchase at the present time.

If you are in a lease option deal and the tenant is unable to obtain financing at the end of the contract and moves out, you retain full ownership of your property and owe them nothing. This places you with a choice of doing another lease option, putting the property for sale, or simply renting it out. What you ultimately choose to do should be up to you and what the market shows you to do at the time.

As the price of property drops in most of the U.S. and homes are foreclosed on at record numbers, this is a prime time to invest in some real estate to rent out. After the market has recovered down the road, then you can likely sell the property for a profit. However, as you know, renting out property makes you a landlord. And, becoming a landlord requires some commitment and a good understanding of your landlord rights.

While there is no one single "landlord legal guide" for you to consult, the use of a good landlord attorney can be priceless if you will be renting out the investment property you own. Your landlord attorney can work with you to make sure that you clearly understand all of your landlord rights and responsibilities right from the start. They can help to advise you on finding good quality tenants, and they can help you when you have a tenant you have to evict as well.

Becoming a landlord is not for everyone. Many real estate investors want to purchase property and then turn around and sell it for a profit. However, when you become a landlord you own that property for a while and have the potential to make more money from it over time than if you quickly flipped it or sold it wholesale to another real estate investor.

If you think about all of the foreclosures happening today, where will all of those people go to live? The quick answer is that they will become renters and there will be literally millions of them in the market for a home to rent in the next few years. Because of the sheer number of potential future renters, becoming a landlord is looking to be a very attractive option for many people who invest in real estate.

As you might imagine, becoming a landlord can be wrought with calls in the middle of the night and complaining tenants. You can help insulate yourself from some of this by hiring a property management company to handle your rental properties.

You can also insulate yourself by offering some of your properties as least option to buy. When you do a lease option you can have your tenant be responsible for repairs and upkeep to the property which keeps you out of the traditional landlord role and one where you are more of a lender with a mortgage interest in the property.

No matter how you look at it, becoming a landlord today looks like it will be profitable for many years to come.

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