Your Experience with "Rent to Own"- as a "Renter/buyer" and "Landlord/seller"

Updated on April 13, 2011
B.B. asks from Berkeley, IL
3 answers

Hi All!

I know this may vary by state, but I wanted to know if you have experience with rent to own homes. What was it like? What do you need to have ready? Lots of paperwork? What are the usual terms?

We are renting for the next 2 1/2 years (we were SO lucky to find a 3 year lease so we're not moving our daughter every year or having the rent rise each year), so I'm just doing some research. I understand that the terms may change by then.

We had to sell our condo as a short sale and as a result have awful credit as well as are unable to purchase for at least 5 years after the sale.

We are hoping to find a rent to own property so we can have a stable place to live and be able to grow into it but have the luxury of renting until we can prove to be good buyers (AND be ready to BUY!! I'm not doing that short sale or heaven forbid a forclosure again- what an awful experience!).

Do you know if you sign the lease as a rent to own if you can break that agreement to rent only and not buy? How does that work?

OR do you have any good websites I can refer all of these questions too. There is so much junk on the web, its hard to find trustworthy info.

Thanks for your input.

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answers from Chicago on

I am a landlord and my current tenant has a lease-to-buy option. Basically his usual lease has a rider which states that until the lease expires he has exclusive rights to buy the property for a pre-agreed-upon price (which is stated in the rider). It also says that he'll receive a credit for $200 per month in which he pays rent to me - so if he rents for two months and then buys, he'll get $400 off the agreed-upon price. If he rents four months and then buys, he'll get $800 off the price. At the end of the lease he can walk away without buying the property, but he also forfeits the $200 per month. Other than those terms, it's pretty much just a normal sale - he'd have to secure his own loan.

1 mom found this helpful


answers from Louisville on

A couple we are friends with lives in a rent-to-own home right now. They signed a 1 year lease with a large deposit. Under their agreement, if they choose not to buy the home at the end of the year, their landlord will keep the deposit. He gave them the option of continuing to lease, but with uncertain employment, they are most likely not going to stay.

The only downside for them right now is that he won't agree to a month-to-month lease while they figure out whether they're staying or going. He's planning on putting the house on the market again after the lease is over.

1 mom found this helpful


answers from New York on

I generally wouldn't recommend a rent to own situation in this market. Too many homes are in financial distress and too many owners don't let you know or people don't do their due diligence to find out. Having the right people on your team really helps. Your team would be realestate agents, bankers, attorneys and financial planner.

If you can manage to save a 20% down payment your won't even get an eye blink about your credit because cash is king not to mention you are in the company of many who have experienced the same financial down turn. If your really are set on doing a rent to own proposition you should learn as much as you can from an attorney as well as a real estate broker (not just an agent).

1 mom found this helpful
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