What are lease options in residential real estate?

In residential real estate, lease options refer specifically to a rental agreement that grants tenants the right to purchase the property after a designated period. This arrangement typically includes a clause within the lease that specifies the terms under which the tenant can buy the property, such as the purchase price and timing. This structure not only enables tenants to occupy the property while giving them the opportunity to buy it in the future, but it also can benefit landlords by providing a potential sale and securing steady rental income during the lease period.

The other choices do not accurately define lease options. For example, the first option describes an indefinite tenancy, which does not involve a purchase option and lacks the specific nature of lease options. The third option speaks to a fixed-term lease, which also does not incorporate a purchase option, while the fourth states that alterations are not permitted, which pertains more to standard lease terms rather than the unique characteristics of lease options. Understanding lease options can be crucial for both buyers and sellers as it offers flexibility and potential pathways to homeownership.