Closed-End Lease
Categories: Real Estate, Investing
Ever shop at Rent-A-Center? It's a store where you can rent to own. Basically, you pick out a lamp or a bed or a TV (or whatever) and then you pay a monthly rental fee. At a certain point, you get the option to buy the furniture outright. You don't have the money to purchase the thing up front, so they offer a kind of layaway program.
A closed-end lease represents the real estate version of this concept. You want a property, but can't afford to buy it outright now. You rent for a while (the way you might rent an apartment), but at a certain point, when the lease term comes to an end, you have the option to purchase the property.