1. What is Lease To Own Home Sale Calculation?

The lease to own home sale calculation determines the final sale price of a property in a lease-to-own agreement by accounting for the capitalized cost, payments made during the lease period, and any buyout amount specified in the contract.

2. How Does the Calculator Work?

The calculator uses the lease to own equation:

Where:

• \( CC \) — Capitalized cost of the property ($)
• \( Payments Made \) — Total lease payments applied toward purchase ($)
• \( Buyout \) — Final payment to complete purchase ($)

Explanation: The equation calculates the net sale price by adjusting the original capitalized cost for payments already made and adding any required buyout amount.

3. Importance of Accurate Sale Price Calculation

Details: Proper calculation ensures both parties understand the true cost of the home purchase after accounting for lease payments and helps prevent disputes during the final sale transaction.

4. Using the Calculator

Tips: Enter all amounts in dollars without commas. Ensure the capitalized cost is the original agreed value, payments made reflect actual payments credited toward purchase, and buyout amount matches contract terms.

5. Frequently Asked Questions (FAQ)

Q1: What exactly is capitalized cost in lease-to-own?
A: Capitalized cost (CC) is the agreed purchase price of the home at the beginning of the lease-to-own agreement.

Q2: Are all lease payments credited toward purchase?
A: Only the portion specified in your contract as "rent credits" typically count toward the purchase price.

Q3: What happens if I don't exercise the buyout option?
A: Typically, you forfeit any payments made toward purchase and the property returns to the owner.

Q4: Can the buyout amount be negotiated at the end?
A: This depends on your contract terms. Some agreements fix the buyout amount upfront.

Q5: Are there tax implications for lease-to-own?
A: Yes, portions of payments may be treated differently for tax purposes. Consult a tax professional.