Rent with Option to Buy - Good or Bad Thing for the Buyer/Tenant?

Personally-I like lease options. However, they must be structured as a Win-Win for both sides. Also, the lease purchaser will need assistance to build their credit to obtain conventional financing down the road.

I am a firm believer people that want  to Lease with an Option to buy, have either, no Down Payment or bad credit, hence the extra money they negotiate towards the purchase is the money they build for the Downpayment. Key is it has to be a win-win. Figure out what the market is doing is it increasing or decreasing and based on that agree to a fair price and a fair agreement.... could be an easy sale for you in the log run.

Even with a win win structure I have only seen one go through in my 24 years.  The others have all been unsuccessful.

As long as rent to buy is an option that is exercised keeping both parties in mind, it's okay. (Well said, Harry, Ender - win-win!)

For whatever reason, I always feel nervous about it, Dr. Stacy-Ann.

I have to say that these are worrisome for me also.  I think as you do, lease and THEN IF you still love it in a year lets talk about it then!

Unfortunately there are sellers/owners who use rent to buy to take advantage of people.  They are selling a hope of buying that might not be realistic.  The price of this hope is higher deposit or option money and higher than normal rent amount.  Then in order for the sales transaction to be successful, the buyer has to qualify and the home often has to appraise for at least a specific amount.  Unfortunately would-be buyers are drawn to these arrangements.  Each rent-to-buy is different according to the terms of the deal and the market  climate.  But the keyword here is caution.

Tracey Ann,

I'm more sympathetic to the sellers in this situation. At the end of the option period, there is no guarantee that the buyers will be able to secure financing, etc. Many reasons to legitimately get out of the contract. The sellers are still on the hook to try and get the house sold.

Thankfully, these are rare in our area, and I think that's for a reason. They rarely work the way they're intended.

Rich

Dr.Stacey, I have done successful Lease to Purchase. It is more beneficial to the buyer than the seller. The buyer is the only one with an option. They can take it or leave it at the end. The seller cannot sell during that time and has no assurance that a sale takes place.

Sellers can sweeten the pie with incentives...think I feel a new post in the making.

Margaret

In Texas - there is not a Texas  lease option to buy form.  If there isn't a form, there is a good reason why it doesn't exist.