01 · Purchase Lease Option
Lock the price today. Decide whether to buy later.
A PLO lets you control a property — and rent it out — for a small upfront fee, with the right (not obligation) to buy at an agreed price. We'll show you the cashflow during the option, the equity profit on exercise, and whether the whole thing is worth your time.
01The Option
The price you and the owner agree to today. It's locked in for the whole option period — that's the magic.
What you pay upfront for the right to buy later. Sometimes £1, often a few thousand.
Solicitor fees, contract drafting, any compliance work. Budget realistically — £2-5k is normal.
What you pay them each month. Usually covers their mortgage.
How long you have the right to buy. 3-7 years is typical.
02Income During the Option
How you'll generate income during the option period.
Realistic rent you'll collect each month, after voids.
Bills, management, maintenance reserve — everything that isn't the owner's payment.
03At the End
What you think the property will be worth when the option ends. Be honest — overoptimism kills deals.
This looks like a strong creative deal.
You'd put £3,501 down and collect £700 a month while you control it.
If values land where you've projected, exercising the option at £220,000 hands you £40,000 of equity.
Total projected return: £82,000 on £3,501 of cash. That's 2342.2% ROI (~468.4% a year).
- Monthly payment to owner. Negotiating £100/mo lower adds £6,000 of cashflow over the option period.
- Projected monthly income. Each extra £100/mo of rent compounds into £6,000 over 60 months.
- Strike price vs projected value. If the property is worth more than the agreed £220,000 at exit, that uplift is your equity profit.
Year-by-year breakdown
- Option fee
- £1
- Set-up & legal costs
- £3,500
- Total upfront cash
- £3,501
- Monthly income
- £2,200
- Less: payment to owner
- − £850
- Less: running costs
- − £650
- Monthly cashflow
- £700
- Total cashflow over 60 months
- £42,000
- Profit on exercise (equity)
- £40,000
- Total projected return
- £82,000
- Monthly cash-on-cash
- 20.0%