Rent with an Option to Buy

Rent with an Option to Buy

Is it a good idea to have a rent with an option to buy clause in a lease if you are a tenant?

If an owner were willing to agree to such a clause, then, presumably, the owner is willing to sell the house.

Given that the owner is, presumably, willing to sell the house, then it follows that whether an option to buy clause exists or not, that the owner would consider an offer to buy from the tenant.

Typically, an option to buy clause has a potential cost.  It might involve an up front deposit, which is not the same as a security deposit and it might, also, involve an additional amount added to each month's rent.  These amounts are set aside in an escrow account by the owner.

If the option to buy is exercised, within an agreed upon time frame, by the tenant, then the money which is being held in an escrow account by the owner, would be given back to the buyer to be used towards the purchase.

If the option to buy is not exercised, within an agreed upon time frame, by the tenant, then the money would be the owners to keep.

The question for the tenant is why would you risk losing money, if you do not exercise the option, when you could just as easily save the money yourself without the risk.

It may be that with the option, you could, also, agree to terms of the potential purchase, such as price, but even this could be risky if property values change.

If this is truly the house that the tenant wants, but the tenant is not yet in a position to purchase the house, then the option clause would lock it up such that nobody else could purchase it while the tenant gets into a position to purchase.