No Tony--don't do it. Purchase Options are good for the tenant/buyer--NOT for the LL/owner! The T/B gets gets someone who will allow him to 'buy' as property even tho he is unqualified to get a loan anywhere. This is usually because he is unable to manage his money and has poor judgement. Tenant/buyers are like children with sweets--their eyes are bigger then their stomaches--they want more than they can handle!
Giving them any kind of purchase documentation will be giving them some RIGHTS to your property--and will muddy your property's clear title. What happens when they don't pay rent and you have to evict them?? What happens IS: they immediately want their "downpayment" back (your Option FEE), and when they realize they are not going to get it--they vandalize, and couse problems in court--saying they are NOT just tenants--they are the property owners! Then the courts, which are still easily confused over this, assume the poor tenant is the victim of the bad LL's scam. This all becomes a big fiasco--always to the LLs detriment.
Once they think they are owners--they will start changing the house to suit themselves. I have tried this 3X! Once I got the house back and it was painted black and purple inside and started to remove an INTERIOR wall, once they had made an illegal addition that the city made me tear off(at MY cost), once when they realizes they would not get their Option money back they stole the stove, fridge, ceiling fans--every thign thei could detach!
You will have to keep paying the mortgage/taxes/ins anyway till (IF) they actually get to the point of buying.
The best way to sell your property to tenant buyers is to take them only as tenants, and tell them you have no intention to sell to anyone else, so they shd just save their money, clean up their credit and try to get a reg bank loan. As soon as they do--you will sell them the house!
You are wrong if you think you will get substancial money upfront to use for your next purchase. 1) buyers that can't qual for a loan just don't HAVE thet kind of money to put out up front--they will want you to ""work with them" 2)You will need to use any money they give you--just to repair clean and re-rent. --137.242.x.xx