What is Rent-To-Own?

By
Real Estate Broker/Owner with Dennis J. Zisa & Associates, Inc. License # 8836971

What is Rent-To-Own?

"Rent to Own", otherwise known as "renting with the option to buy", is a technique where the tenant, in addition to a lease, is given the right or "option" to purchase the property at some point in the future.

Here at Dennis J. Zisa & Associates, we utilize this technique in order to accommodate those who wish to own a particular home on a seller financed installment sale, but do not have the required down payment ($3,000-$6,000) which is needed for an installment sale purchase.

With Rent-To-Own, you move into the home like you would any other rental, with just the 1st months rent and security deposit. Then over the course of the first 12 months of your lease, you have the opportunity to accumulate rent credits and "good tenant rebate" credits which, when put together with your security deposit, make up the full down payment required to own the home on an installment sale purchase.

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Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
FrankRubiRealEstate.com

Dennis, this is an excellent way to home ownership. We just need to keep an eye on the government. There is some talk of not allowing this type of transaction in the future. 

Aug 03, 2011 05:44 AM #1
Rainmaker
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Donnie McKinney
Purchase Realty Group - Paducah, KY
Donnie McKinney CCIM, Purchase Realty Group

There are a lot of ways to use leases with an option to purchase or rent to own, but many have negative emotions about them. Our youth pastor is taking a church a couple of hundred miles away, and hasn't sold his house, yet. They found a home they want to buy, but can't buy it. So, they are exploring the lease with option route to get the house, and then pay for it when they sell theirs. That's a positive emotion ;)

Aug 03, 2011 05:53 AM #2
Rainmaker
346,591
Dennis J. Zisa & Associates, Inc.
Dennis J. Zisa & Associates, Inc. - Camden, NJ
29 years in So. Jersey and the Greater Camden area

You're so right Frank! Government intervention and over reach plagues all free market commerce and industry, but threatens to be particularly onerous to ours, ie.  Dodd-Frank!

Mckinny & Assoc.  Thanks for the post! Obviously, there are as many ways to structure these types of transactions, as practitioners who put them together. The subject of this blog is a transaction designed for someone wanting to purchases the particular home on a seller-financed installment sale, but is lacking the full down payment. It allows them the opportunity to own the home, after 12 months, without needing to come up with any more funds.

Aug 03, 2011 06:39 AM #3
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Dennis J. Zisa & Associates, Inc.

29 years in So. Jersey and the Greater Camden area
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