Has Anyone Ever Contracted in to a 'Rent to Own' House Scenario?

Updated on September 27, 2011
K.A. asks from North Brunswick, NJ
8 answers

Our real estate agent has offered us a 'rent to own' house and was wondering your experiences? THanks

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answers from Redding on

I've heard of leasing with an option to buy, but never renting to own.
Maybe it's just a different wording.

Read any contracts very carefully before signing.

Best wishes.

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answers from Dallas on

yes, do not do it! i met a man years ago that owned a house across from mine. we asked if we could buy the very small modest house because there was constant turn over of tenants. he said "no way" i make way too much money on these people that think they are buying this house. they put down $4000 and 2 years later they are gone. he said he owns about 100 houses and in 30 years of doing the rent to own business he has had one person actually complete the deal.

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answers from Dallas on

My only experience with rto is that you end up paying more for what you are buying. There are many risks, too. What would happen if you have to relocate? Do you lose everything you have put towards owning the home?

I was curious about rto homes and found this article.



answers from Lakeland on

The rent to own is like making a down payment over time, if the tenant decides not to buy the landlord gets to keep the extra payments. I would not go into this if you are unsure of buying the property. If you are ready make sure to read the contract carefully and I suggest having a lawyer (some states do not require one).
I am a landlord and we have a property that is currently listed for rent with the option to buy (our home in PA). My husband and I will have the tenant sign a one year lease if they only want to rent, if the tenant wants to buy it there would have to be a separate contract that we (the landlords) and the tenants would agree on. As for doing any major changes to the home, we would not allow it.
I read through the other posts and it is sad that there are landlords out there that are only out to make a buck. I am surprised that any realtor would keep doing business with someone like that.


answers from Richmond on

We've looked into it a few times, I'm not sure why it gets such a bad wrap. As long as you (and your lawyer and real estate agent) go over the contract, add your own addendum's and such, it's a great opportunity, especially the way things are now. Lot's of people want to sell, but since no one's buying, they move onto the rent to own (or just rent the house). It protects both the seller AND the buyer... usually most rental agreements can easily be terminated, like if the landlord doesn't like the way you've painted the interior, or finds better, higher paying tenants... you're outta there; but not in a rent to own situation.

Unless of course you can afford to buy, then cut out the rent part and purchase the home, if that's what you were originally looking to do.

Best wishes!



answers from Bloomington on

It's kind of a shady practice altogether. It protects the actual owner of the property more so than the tenant/buyer.

*You pay more for your "down payment" than a typical deposit.
*You are responsible for the taxes (which is usually in a rent payment anyway) But, this gives a tax break to the original owner.
*The tenant/buyer is responsible for all repairs (this is the biggest downfall, because most of these places are fixer -uppers)
*Some contracts require permission to build/repair/remodel something on the property.

Something I would question is if the orginal owner stops paying the first mortgage on the house and it were to go into foreclosure, how does this affect the tenant/buyer.

Do ALL of your homework before doing this. Try to find out all you can about this agent.

A friend of mine has now "bought" a few of these places in a row from different people. She has moved every few years and loses the money she put down and all the repairs made. Right now she is in an old house that needs serious repairs and windows. The agent promised to re-side the place and replace a handful of windows. It took almost 8 months to get some of the windows and it's been over a year and the place still needs siding. The agent she is "buying" from is known to be the top dog in that area. I'm not impressed.



answers from Tulsa on

I know people who actually pay rent in cash, have no paperwork, and think they are renting to own.
If you have screwed up credit, if you are sure this is the house you want, and if you have a lawyer review the contract it might be ok.


answers from Dover on

Based on the answer below, that particular owner clearly had a shady contract written up. Most rent-to-own scenarios will require a relatively small chunk of money up front, but whether or not you recoup that money should you later change your mind & move out all depends on how the contract is written. Protect yourself with a good lawyer you trust & I can see no issues with it.

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