Rent to Own Homes

Purchasing a home requires a certain amount of financing that can be difficult to obtain if you are not in the best financial situation. If you would like to buy your own home, but can't secure a loan, you may want to consider renting to own.

Rent to own homes benefit the renter/buyer as well as the landlord. Renters can build equity toward home ownership with no bank or finance company involvement, and poor credit history may not be an issue. A landlord benefits in the situation that they need to maintain ownership for at least one year for tax purposes, they are unable to get a fair price due to local conditions, and/or they are tired of performing minor maintenance on their rental properties.

A rent to own home has a standard lease with a built in option to buy the home over a period of time. In general, rent to own homes offer rent credits that reduce the final purchase price of the home. That way, your rent money is actually working for you.

In order to have the rent to own option, the renter/buyer must pay a one time, non-refundable fee called the option consideration. The exact amount is negotiable, but it usually ranges from 2.5 to 7% of the purchase price. A fair contract will credit the buyer 100% of that option consideration upon closing of the sale.

Some percentage of all rent payments should be applied toward the purchase price of the home as well. Be sure to sit down with your landlord and talk out all terms and conditions of your lease before signing any contracts.