Lease Option Calculator

Rent credit accumulation and purchase price toward option.

Legal Disclaimer

This calculator provides general estimates only and does not constitute legal advice. Laws, regulations, and court procedures vary significantly by jurisdiction. Consult a licensed attorney in your area for advice specific to your situation.

DEGRAD

How to Use This Calculator

Enter Agreed Purchase Price locked in the option agreement and the Option Premium paid upfront.
Set Monthly Rent and Rent Credit % — the portion of each month's rent applied toward the purchase.
Enter Option Term in months and comparable Market Rent for a similar property.
Set Expected Annual Appreciation % to see property value at option expiration.
Review Effective Purchase Price — the locked price minus accumulated rent credits and option premium.
Compare Monthly Premium Over Market to determine the real cost of the option feature.

How the result changes with Agreed Purchase Price ($)

Agreed Purchase Price ($)	Effective Purchase Price	Total Rent Credits
5,000,000	$4,979,800.00	$13,200.00
17,500,000	$17,479,800.00	$13,200.00
32,500,000	$32,479,800.00	$13,200.00
45,000,000	$44,979,800.00	$13,200.00

What each input means

Agreed Purchase Price ($): Locked-in purchase price in the lease-option agreement.
Option Premium ($): Non-refundable upfront payment for the purchase option.
Monthly Rent ($): Total monthly rent paid under the lease-option agreement.
Rent Credit (%): Percentage of monthly rent credited toward the purchase price.
Option Term (months): Length of the lease-option period in months.
Market Rent ($): Comparable market rent for a similar property without an option.
Expected Annual Appreciation (%): Expected annual property appreciation rate.

What each result means

Effective Purchase Price: Purchase price minus accumulated rent credits and option premium.
Total Rent Credits: Total rent credit accumulated over the option period.
Monthly Rent Credit: Portion of each month's rent credited toward purchase.
Total Rent Paid: Total rent payments over the option term.
Monthly Premium Over Market: How much more you pay monthly versus market rent.
Total Premium Over Market: Cumulative above-market rent paid.
Estimated Value at Exercise: Projected property value at end of option term.
Instant Equity at Exercise: Difference between projected value and effective purchase price.
Option Premium (% of Price): Option premium as a percentage of the purchase price.
Break-Even Appreciation (%): Annual appreciation needed for the option costs to be worth it.

How this is calculated

Worked example, using the default values

Identify Input Parameters
4 parameters
Agreed Purchase Price ($) = 350000, Option Premium ($) = 7000, Monthly Rent ($) = 2200, Rent Credit (%) = 25 = 7 input(s) provided
Calculate Effective Purchase Price
Effective Purchase Price = r(effectivePrice)
329800 = $329,800
Calculate Total Rent Credits
Total Rent Credits = r(totalRentCredits)
13200 = $13,200
Calculate Monthly Rent Credit
Monthly Rent Credit = r(monthlyRentCredit)
550 = $550
Calculate Total Rent Paid
Total Rent Paid = r(totalRentPaid)
52800 = $52,800