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October 15, 2019:

So You Want A Rent To Own Home...


You're tired of throwing your money away on rent. You're tired of having to move every year or two. You want to participate in the American dream - HOME OWNERSHIP - but, you can't get a mortgage. Then you hear about a creative approach toward home ownership called rent to own, aka lease to own and lease/option. It sounds too good to be true, so you jump online looking for rent to own home websites and scour your local newspapers searching for that right home. You find it, sign the contracts, pay your fees, move in and disaster hits within a few months. Soon you are out of a home, out of a lot of money and bitter about the rent to own concept. WHAT HAPPENED? The odds are you didn't do your homework, assumed everything is ok and did not seek professional help. However, you blame everything on the rent to own approach.


Things started to go wrong for this person as soon as he/she started to look for a rent to own home. The first thing that should have been done was make an honest personal assessment. Should renting to own even be considered?

  • Will you be able to get a conventional mortgage within 2 years? If yes, wait till then.
  • Do you have an excellent track record of paying your rent on time? If no, don't rent to own.
  • Do you have steady employment and a good job future? If no, don't rent to own.
  • Are you willing and able to take on the responsibilities of home ownership? If no, don't rent to own.
  • Do you believe the contracts presented to you for your signature by the seller/landlord will protect your interests? If yes, don't rent to own.
  • If you don't have any option consideration (down payment), don't try to rent to own.
  • If you see an offer that says no credit check, stay away.

Here's a cold, hard fact: Over 90% of all rent to own deals never convert into a sale. Another cold, hard fact is that most rent to own deals should never be done. Too many people are na´ve, uneducated and careless regarding complex legal transactions like rent to own agreements. Many times continuing to rent is the proper thing to do.


However, renting to own can be the right choice under the right circumstances.

  • You pass the self assessment test above.
  • You find a home offered by a fair and honest seller. Things to look for regarding a seller include a good track record of rent to own conversions, willingness to negotiate, insistence for a credit check, demand for option consideration of 3 to 5%, etc.
  • You have a realistic expectation of qualifying for a mortgage within the lease term specified in the rent to own agreement.
  • You understand that a rent to own contract is negotiable, and you are able to either do the negotiations yourself or hire someone to do this for you. This normally is not an attorney. For a few tips regarding negotiations, see Ten Tips For Aquiring A Rent To Own Home.
  • You use the services of an attorney to ensure the transaction is legal and properly recorded.

Be realistic, be fair, and a rent to own deal can be successful which means the lease converts into a sale. Happy house hunting.

About the Author
Bob Pappas is an associate of JSC Rent To Own Homes, where buyers and sellers can match up in a totally free and open environment. Bob acts as an investing third party in certain situations where either a renter would like to purchase a new house or the house he/she is currently renting, or a seller wishes to sell his/her property through a lease purchase agreement.

For more information, visit https://www.jscinvestments.com/