Purchasing a home is one of life’s biggest expenses, and without proper credit, obtaining a loan is sometimes out of the question. Meanwhile, renting a home without the option to buy is like throwing money down the drain (and on a monthly basis, we might add). You’d lease a car, why not lease a home?
Rent to own home agreements are sometimes referred to as lease-option agreements. In these contracts, two parties (the tenant-buyer and the landlord-seller) agree upon a set of terms. The tenant-buyer (that’s you!) pays a specified amount of rent each month for a set period of time, usually between 1-3 years. At the end of that time period, the tenant-buyer has the option to purchase the home, with a percentage of previous rent payments being applied to the property’s asking price. The asking price is determined at the beginning of the contract, so the home’s value could potentially increase (woo-hoo!) or decrease (boo) during that time. This is just one of the many intricacies involved in entering into a rent to own agreement, visit our FAQs for more.