A rent-to-own home, sometimes called a lease option, is a good choice for people who wish to move in to a new home immediately but may not yet have the financial resources to purchase it. Such agreements allow leasers to pay an up-front fee, called an option, in order to reserve the right to buy the home in the future.
Rent-to-own options are also good for people who want to move but are unable to sell their current homes. Such a deal allows the seller to have someone in his old home paying money in order to afford the mortgage on his new home. Usually a portion of the monthly rent can be applied to the future purchase of the home, as well.
Rent-to-own contracts can be more complex than standard home sales. There are several different options for executing these types of sales, and state laws vary on what is permitted. For example, in some contracts, the rent-to-own provision is an option that can be turned down, while in others it is an agreement that must be honored. Thus, it is an especially good idea to have a lawyer read over any rent-to-own contracts to make sure all parties understand what their obligations are.