Q:

What is rent-to-own real estate?

A:

Quick Answer

Rent-to-own real estate is a house that a potential buyer, who for whatever reason is not in the position to buy the house, pays rent to occupy, part of which applies to the purchase of the home after a specified time. Another term for this transaction is lease optioning.

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Full Answer

Possible benefits from this type of agreement are that the seller is getting money for his house in the interim rather than letting it sit empty, and the potential buyer is putting some of his rent money toward an investment.

A drawback for the owner is that the renter may decide not to buy the house after all, putting the owner back at square one of the selling process. In addition, wear and tear to the house may make costly repairs necessary.

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