Usually, the option price is set at the market value when signing the lease-option. If the home's market value goes up during the lease-option term, the buyer benefits. Should the property drop in value, then the tenant usually doesn't complete the purchase. Another seller advantage is earning above-market rent. Landlords can charge tenants 10 to 20 percent above market rent.
Seller keeps the tax deductions.
During the lease-option period, the seller retains all the property income tax deductions. If a tenant complains about not receiving any tax benefits, a reminder about the rent credit toward the down payment usually ends the discussion. This option money is in lieu of a security deposit. Monthly rent credit builds a down payment. The unique characteristic of a lease-option is the rent credit toward the buyer's down payment.