Finally- Rent to Own FAQ's: All You Need to Know 



Q: What exactly is rent-to-own and how does it work?

Rent-to-own is a unique agreement where you lease a home with the option or commitment to purchase it in the future.

It works by allowing a portion of your monthly rent payment to contribute towards the down payment of the house, with the terms set out in a contract that includes an option fee and the rental premium.

Q: Who is responsible for maintenance and repairs in a rent-to-own situation?

This can vary depending on your specific contract. Some agreements stipulate that the tenant handles all maintenance and repairs, while others may require the landlord to take responsibility. It's critical to clarify this in your rent-to-own agreement.

Q: Can I negotiate the purchase price of the home?

Yes, typically, the purchase price can be negotiated at the beginning of the rent-to-own agreement. This price is often locked in regardless of future market changes, which can benefit you if home values increase.

Q: What happens if I decide not to buy the property after my lease ends?

If you choose not to exercise your purchase option, you may lose any non-refundable option fee and rental premiums paid towards the down payment. Make sure to understand the terms of your agreement before entering into a rent-to-own deal.

Q: How does a rent-to-own agreement benefit sellers?

Sellers benefit from a steady income stream during the lease term and have the potential to sell to tenants already invested in the property. It can also be an attractive option when immediate buyers are not available.

Q: Does rent-to-own improve my chances of getting a mortgage later?

Renting-to-own can demonstrate financial stability to lenders when you apply for a mortgage later on. Consistent rental payments can improve your credit history and increase your chances of loan approval at the end of your lease term.

Q: Are there any risks involved with rent-to-own agreements?

As with any real estate transaction, there are risks, such as losing money invested if you don’t proceed with buying the home or being unable to qualify for financing when it’s time to purchase. It's essential to consult with a real estate attorney and fully understand your contract.

Q: What should I do before entering a rent-to-own agreement?

Before committing to a rent-to-own deal, conduct due diligence just as you would when buying a home outright. This includes having home inspections, appraisals, and reviewing all terms with a knowledgeable attorney or real estate professional.