What is rent to own?

If you’re like many homebuyers, your ability to purchase a new house will depend on the mortgage. To get this, you must have a good credit score and cash for a down payment. Without these, the traditional route to homeownership may not be an option.

Sometimes, you don’t have enough money saved up to pay a downpayment or you are in a job transition and cannot qualify for a loan. Perhaps you have a divorce that isn’t yet resolved or another financial hurdle in your path.

If this is the case, you might be interested in a rent-to-own home. When structured correctly, these arrangements can provide many benefits for both the seller and buyer.

It’s not easy to find these opportunities simply by browsing real estate listings. You also need to be cautious of unscrupulous sellers. Expert agents who have been involved in the rent-to-own process were able to help us identify where to look and which pitfalls to avoid.

Rent-to-own agreements offer both a standard lease agreement as well as the option to purchase the property later.

Lease-option contracts allow you to purchase the home after the lease ends, while lease-purchase agreements require you to do so.

The rent is payable throughout the lease. In some cases, a portion of the rent can be applied to the purchase price.

You may be required to maintain and pay for repairs under some rent-to-own contracts.

How does rent to own work?

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