In the current property market, where competition is fierce and traditional financing routes can slow you down, creative deal structures like option agreements and purchase lease options (often referred to as PLOs) are becoming indispensable tools for smart investors. These strategies allow you to control property without owning it outright, lock in future prices, secure a big uplift potential and minimise the upfront risk.
YPN has published dozens of real-life case studies featuring investors who have used these techniques to secure incredible results – sometimes turning run-down, problem properties into six-figure opportunities. YPN Plus members even get access to example legal documents, including option agreements and purchase lease option templates, to help them learn the mechanics behind these strategies.
Let’s break down how these agreements work, why they’re so powerful, and how investors are using them right now.
What is an option agreement in property?
An option agreement gives you the exclusive right, but not the obligation, to buy a property within a specified time period, at an agreed price.
Think of it as pressing the “reserve” button on a deal. You’re locking in the price today while giving yourself time to:
- Carry out due diligence.
- Raise finance.
- Secure planning permission.
- Add value before you buy.
- Decide whether the deal really stacks.
You typically pay a small option fee (sometimes this can be as little as £1!) for the privilege of securing that right. If you don’t exercise the option, you simply walk away – your downside is limited to the option fee and any planning or professional costs.
What is a purchase lease option (PLO)?
A purchase lease option is similar, but with an added twist. You also lease the property during the option period, which allows you to generate income from the asset, controlling and managing it as if you own it. Should you choose to, you can also improve the property and take measures to stabilise the rental or commercial income before you actually buy it.
PLOs are especially powerful for properties with poor cashflow or that are in need of refurbishment. In addition, they are ideal tools to use when the owner wants hands-off income or is struggling to sell on the open market, or where lending is difficult initially.
PLOs are regularly used in rent-to-rent transitions, commercial conversions and cashflow-tight assets.
Why creative investors use option agreements
- Reduce upfront risk
You’re not buying the property immediately; you’re securing the right to buy while giving yourself time to de-risk every element.
- Add value before you own
This is where the magic happens. Smart developers use options to:
- Secure planning
- Improve layouts
- Change commercial use
- Negotiate better leases
- Unlock hidden value
You’re increasing value without a mortgage, without interest, and often without competition breathing down your neck.
- Lock in today’s price for tomorrow’s value
If the market rises or planning comes through, the uplift is yours – not the seller’s.
- Solve problems for motivated sellers
There are several reasons why owners might consider a PLO. For example, they may want:
- Certainty
- A future buyer
- A hands-off solution
- Time to take advantage of optimal tax planning
- Delayed completion
Options give them exactly that, while giving you flexibility at the same time.
YPN case study: Using an option agreement to secure a dilapidated barn and achieving an uplift of £690,000
One of the most inspiring recent examples shared inside YPN came from a member who used a simple option agreement to control a run-down barn in a rural area.
Here’s what happened:
- The seller wanted certainty but didn’t want to pay for planning themselves.
- The investor saw huge potential but didn’t want to risk buying unconditionally.
- They agreed a five-year option agreement.
- Option fee: just £1,000
- Purchase price: fixed at £60,000
During the option period, the investor secured planning permission for a barn conversion and designed a beautiful residential dwelling, which increased the site’s value dramatically.
Result:
A site now worth £750,000 GDV – controlled for just £1,000 upfront, without ever owning it during the planning phase.
It’s the perfect example of how options allow ordinary investors to achieve truly extraordinary results by controlling opportunities rather than chasing fully developed deals on the open market.
YPN case study: Using a one-year option to secure two commercial Grade II listed buildings
Another standout deal featured in YPN involved a member who negotiated a 12-month option agreement on two Grade II listed commercial buildings.
The goal? To secure planning and finance before completion.
During the option period, the investor:
- Worked with heritage specialists
- Secured planning permission for conversion into 10 luxury apartments
- Agreed finance terms with a development lender
- Built an appraisal showing a GDV of £2.1 million
Without the option agreement, the investor would have needed to buy first – taking on enormous risk with no certainty of planning.
Instead, they were able to control the site without a mortgage and protect themselves from planning refusal, having locked in a favourable purchase price. The end result was a massive increase in value before they even exchanged contracts.
This is exactly the kind of creative problem-solving we regularly showcase inside YPN Magazine – real people using smart strategies to outperform the market.
How investors structure option agreements
A typical option agreement includes:
- Option fee (from £1 upwards)
- Length of the option period (one to five years is common)
- Agreed purchase price (fixed or formula-based)
- Responsibilities during the option period
- Access rights
- Planning clauses
- Timescales and legal conditions
Solicitors familiar with creative strategies are essential, and YPN regularly highlights expert legal contributors who specialise in these agreements.
Why sellers agree to options
Many investors assume sellers won’t accept delayed deals. In reality, motivated sellers often prefer them for several reasons.
- Certainty of sale
They lock in a buyer without agents, viewings or fall-throughs.
- Time for tax planning
Choosing the right tax year can save thousands, particularly if they are selling multiple properties or units.
- No upfront costs
They don’t have to spend money on planning, repairs or legal work.
- They benefit from a problem being solved
Whether it’s due to vacancy, maintenance costs or commercial tenants leaving, options can offer relief from pressing problems.
When a purchase lease option (PLO) is better
Use a PLO when you want to generate income during the option period. A PLO is perfect for:
- Properties with poor rental management
- Commercial units that need repositioning
- Landlords who want guaranteed income
- Assets that need refurbishment before long-term finance
A PLO lets you take over control, improve the asset and profit from it – all before buying.
Key risks and how to protect yourself
While powerful, options must be used responsibly. Here’s what to watch for:
- Planning uncertainty. Always run a feasibility check before committing.
- Legal complexity. Use solicitors experienced in creative agreements (YPN often interviews and features them).
- Due diligence is still essential. Just because you haven’t bought the property yet doesn’t mean you skip the surveys and inspections.
- Over-estimating GDV. Be conservative – use comparables, not hope.
Why YPN champions creative property strategies
For over 18 years, YPN has showcased real-life investors using strategies like options, purchase lease options, assisted sales, joint ventures and vendor finance.
These aren’t theories. They’re actual deals from people who started with limited funds and have built impressive portfolios using creativity, not huge cash reserves.
YPN Plus members also benefit from:
- Template option agreements
- Template PLO agreements
- Step-by-step walkthroughs
- Detailed case studies
- Webinars with legal experts
These resources help investors apply creative solutions safely and effectively.
Final thoughts…
Option agreements and purchase lease options are two of the most powerful tools in a property investor’s toolkit. They allow you to control property, add value, reduce risk, and unlock opportunities that traditional buyers can’t touch.
Used well, they offer a pathway to scaling faster, securing bigger deals and achieving results that would be impossible with mortgages alone.
