If you get on the internet or listen to many financial gurus, you will often hear that houses for rent to own are not a good deal for the buyers.  This is thanks in part to the fact that many real estate investors use these type of transactions to take advantage of individuals with bad credit that are less educated.  In these type of transactions, the terms are set such that the buyer tenant could never actually exercise their option.  The goal of the investor is to have someone pay an upfront option fee now, and then repeat the process and collect another option fee from a different buyer tenant next year.

While poorly structure rent to own home contracts are certainly not to the advantage of the buyer tenant, a well structured contract can be a sound financial decision.  Let’s look at some key benefits of rent to own deals for buyers.

Allows You to Buy – Despite the Credit Market

One benefit of a rent to own deal is that it can give you buying power even though you may not qualify for a mortgage now.  This is especially important for many people who could once buy a home, but are unable to qualify based on the tightening lending guidelines.  When you executed a rent to own or lease option contract, you have the exclusive right to purchase the home until the option period expires.  Typically this will be two or three years, which gives you the time you need to improve your credit.

Gives You Flexibility

While a rent to own contract gives you the exclusive right to purchase the home, you are not legally required to purchase.  On the other hand, the seller is legally required to sell you the home at the agreed upon price – even if someone else comes along and offers them more.  This gives you the peace of knowing that you have the house locked up and than no one else can buy it as well as the flexibility to change your mind.


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