Florida’s condo market, once a goldmine for real estate investors and homeowners alike, is facing new challenges. High HOA fees and stiff competition in the housing market have made selling condominiums more difficult. Property owners increasingly find themselves stuck with unsold condos, searching for creative solutions to move these properties.

Enter Lease Options—a strategy that not only helps property owners find relief but also offers a lucrative opportunity for real estate investors. Even better, these properties can often be leveraged as short-term rentals, opening up multiple streams of income. This blog will walk you through how Lease Options work, their benefits, and a real-life example of how you, as an investor, can profit by getting creative with Florida condos.

What Is a Lease Option?

A Lease Option is an agreement that combines a rental contract with the ability to purchase the property at a pre-agreed price within a specified timeframe. Here’s how it typically works in two stages:

1. Lease Agreement

The investor leases the property from the owner, agreeing to a monthly rent. This provides control over the property without ownership.

1. Option to Buy

For an upfront fee (the option payment), the investor gains the exclusive right to purchase the property within a set timeframe, usually at an agreed-upon price. This makes it a versatile strategy for investors to test profitability before committing to a full purchase.

What makes Lease Options especially powerful is their flexibility. Investors can use this strategy to generate profits without the need for large upfront capital and can structure deals to suit their needs, such as subleasing the condo for short-term rentals.

Why Florida Condos Are a Perfect Fit for Lease Options

Florida’s condo market provides a unique opportunity for investors due to these factors:

High HOA Fees

Condos often come with significant HOA fees, which can deter buyers. However, a Lease Option allows the burden of those fees to remain with the owner (or be offset by rental income), making the property more attractive to investors.

Market Saturation

With a large inventory of condos on the market, owners are increasingly open to alternative selling methods. Lease Options provide a win-win scenario for both owners and investors.

Tourism and Short-Term Rentals

Florida’s booming tourism industry makes condos ideal candidates for short-term rentals. Investors can leverage platforms like Airbnb to generate rental income, turning a potentially stagnant property into a thriving asset.

Minimal Initial Investment

A Lease Option minimizes risks for investors, as it requires far less upfront capital than purchasing a property outright.

The Lease Option Process for Investors

Step 1: Identify a Condo Owner in Distress

Start by targeting property owners struggling to sell their condos due to high HOA fees, market conditions, or a lack of buyer interest.

Step 2: Negotiate Lease Option Terms

Propose terms that benefit both parties. For example, the property owner may still handle HOA fees, while you cover the monthly rent (with the option payment adding security for the owner).

Step 3: Sublease as a Short-Term Rental

Once you’ve leased the property, list it on popular short-term rental platforms. Florida’s popularity as a tourist destination ensures a steady stream of potential tenants.

Step 4: Execute or Exit the Option

At the end of the lease term, you’ll have options to buy the property, renegotiate with the owner, or walk away with your profits from subleasing.

Example of a Lease Option with Short-Term Rentals

Here’s what a potential deal might look like.

Owner/You (Investor)

• Sales Price: $325,000

• Option Payment: $6,000

• Monthly Payment (Rent): $2,000

• Term: 24 months
  
  

You (Investor)/Short-Term Renters

• Nightly Rate (Average): $150

• Occupancy Rate: 65% (typical for Florida rental properties)

• Monthly Income (Estimated): $2,925

• Option-to-Purchase Term: 24 months
  
  

Breaking Down the Financials

                     Option Fee Profit 

• You pay the owner a one-time option fee of $6,000.

• You recoup this investment by generating cash flow from short-term rentals.
  
  Monthly Cash Flow

• Monthly Rent Paid to Owner = $2,000

• Monthly Income from Short-Term Rentals = $2,925

• Profit = $925/month

• Over 24 months, that adds up to $22,200.
  
  Long-Term Buy Potential

• If you decide to purchase the condo at $325,000, it could appreciate significantly during the term, further increasing profitability.
  
  Exit with Profits

• If market conditions shift or a better buyer emerges, you’re not obligated to buy. You’ve still earned over $22,000 in cash flow during the lease term.
  
  

Benefits of Lease Options for Condo Owners and Investors

For Property Owners

• Alternative Selling Method

Lease Options attract investors when traditional buyers are scarce.

• Offset Costs

Monthly rental payments help cover HOA fees, property taxes, and other costs.

• Security

The option payment provides assurance that the investor is serious.

For Investors

• Low-Cost Entry

Gain control of valuable properties without large down payments.

• Steady Cash Flow

Short-term rentals ensure consistent income.

• Flexibility

You’re not locked into purchasing the property, minimizing your financial risk.

Final Thoughts

High HOA fees and market saturation might make Florida condos a challenge for traditional buyers, but Lease Options provide a smart, profitable solution for both property owners and investors. By leveraging this strategy to use condos as short-term rentals, you can unlock new income streams while helping sellers unload their properties.

With some creativity and a focus on providing win-win deals, you can turn Florida’s condo market challenges into opportunities. Start exploring Lease Options today, and take your real estate investing strategy to the next level.