A rent-to-own agreement is when you rent a home for a certain amount of time with the option to buy it before the lease expires. Rent-to-own agreements typically consist of two parts. A standard lease agreement and an option to buy.
A rent-to-own agreement is a deal in which you commit to renting a property with the option to buy it before the lease runs out. Agreements usually include a standard lease agreement and an option to buy. Lease option contracts give you the right to buy the home when the lease expires. You pay rent throughout the lease and a percentage of the rent payment is applied to the purchase price.
Renting to own can be an appealing concept for people who are interested in owning property but are not able to or not interested in the traditional home buying process. If you don’t have a good credit score or a sizable down payment, renting a property with the intention to buy it can give you time to save money and improve your credit score.
Entering into a rent-to-own agreement usually means signing a formal legal contract that specifies the terms of the agreement. Typically, the rent is slightly higher than the going rate for the area in which you are buying the house, with a part of the payment going towards the purchase of the house.
Treat the process the same as you would if you were buying the house outright. Do you due diligence, compare prices with other nearby homes, research the area, and research the seller’s history. Owning a home is usually the biggest investment you will ever make, take your time and make a decision based on all the facts presented to you.