A lease option is a rental agreement that gives the tenant the right to purchase the property at a later date. In this arrangement, the tenant pays an upfront option fee, which can be credited toward the purchase price if they decide to buy. The lease typically lasts for a set period, often one to three years. During the lease term, the tenant pays monthly rent, which may be higher than the market rate. This extra amount can also contribute to the eventual purchase price. This option benefits both the tenant, who can secure a future home, and the landlord, who receives steady income and potential buyers.