Lease with option to purchase (LOA) is a type of rental agreement that gives the tenant the option to purchase the leased property at the end of the rental agreement. The advantages of LOA are multiple:
- Lower Monthly Payments: Monthly payments for a lease are typically lower than a traditional loan because you only pay for the use of the vehicle rather than the total cost.
- Flexibility: LOA offers great flexibility, as you can choose the duration of the rental and the amount of the monthly payment. This can be useful if you do not know how long you want to keep the property or if you want to try the product before buying it.
- Possibility to purchase the product: At the end of the rental contract, you have the option to purchase the rented property at a pre-agreed price. This allows you to test the product before making a final purchase decision.
- Maintenance Included: Some LOA contracts may include maintenance and repair costs in the monthly payment. This can be beneficial for those who do not want to have to pay for maintenance or repairs to the property.
- Easy exchange: If you decide not to buy the property at the end of the tenancy, it is often easy to return it and move on. You don't have to worry about selling the property or having it exchanged.
- Tax benefits: Depending on your tax situation, there may be tax benefits to renting to own. For example, monthly payments may be tax deductible if you use the property for business purposes.
