How is a "lease option" structured?

A "lease option" is structured as a lease agreement that includes the tenant's option to purchase the property at a later date. This arrangement typically allows the tenant to lease the property for a specified period while securing the right to buy it within that timeframe. The lease payments may also be structured such that a portion of them is credited toward the future purchase price, which makes the option an attractive choice for individuals who may need time to secure financing or who want to test living in the property before committing to a purchase. This structure offers flexibility and potential financial benefits for both the landlord and tenant, distinguishing it from a mere rental agreement or other arrangements like gifts of property.