Hi Joe,

I see you're looking to do a lease option. I've been doing a few of those thru the years so I'll tell you what I know. The benefits are:
-  you take a much bigger downpayment than you would thru a rent only
-  when you lease to purchase the would-be-owner has to take care of the maintenance on his/her own, not like a rental where the phone is constantly rigning with silly little things to take care of
-  the tenant, feels more like a part-owner of the home and (theoritically) will take better care of the house
-  also, some would-be-owners like to make little improvements on the house like flower beds, storage sheds, decks, and alike which if they fail to close remain as part of your property

However, there are a few things to keep in mind and be careful with. I would never do a lease purchase without having the other party go thru a pre-qualification process with the bank to see where they stand as far as their purchase power goes. I need to know exactly what kind of credit problems we will face and how long will it take for them to fix them.

I learned thru the years that long leases are a BAD thing. Do one year to 18 months tops with the option of extending it another 6 months. If the would-be-buyer cannot close in 18 months, you can extend the lease for a non-refundable $1,000 fee that will not apply to the purchase price. The reason for that penalty is that they feel motivated to close earlier rather than later. Second, if they have to extend the lease, adjust the price accordingly. Check out the average appreciation in the area and if the houses appreciate 3% per year you add 3% to the purchase price for extending the lease another 12 months. This helps you in two ways, first you do not lose any appreciated value of the property, second, you motivate the other party to hurry up and close.

I hope this helped! Let me know if you have any questions! I've been there, done that!   MeliG