Guide: Get into Your Dream Home Faster with Rent with the Option to Buy Homes

Wouldn’t it be nice to defer the upfront cost of a down payment on a home? Does the thought of living in a home for a few years before buying it sound appealing? If you answered yes to either or both of these questions, then rent-to-buy homes might be a good fit for you.

When you find rent-to-own homes, you sign an agreement that allows you to pay monthly payments and live in the home for a period of time before deciding whether or not to purchase it.

Rent To Buy Homes

Rent to Own Real Estate

The thought of homes for rent with the option to buy can be a great fit. If you are unsure of your long-term job location, or don’t have a solid bank account for a down payment on a home, then rent with the option to buy can be a lifesaver.

However, homes for rent-to-own can be difficult to find, and the process can be complicated. You can’t get caught up thinking rent-to-buy houses are going to simplify your life and ignore the complicated process of rent-to-own programs. If you get rent-to-own homes, it is important to know how the process works.

When you are looking for rent with option to buy homes, chances are that you have many questions, including:

  • Where do you find rent-to-own homes?
  • Are homes for rent to own options a good investment?
  • What should you consider when looking at rent-to-own real estate?
  • What are the drawbacks to homes for rent with option to buy?

Throughout this guide, we will answer the questions surrounding the rent-to-buy scheme. We will explain the process behind rent with option to buy homes, and where you can find rent-to-own homes. Finally, we will provide a detailed review of 7 tips to get rent-to-own homes.

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Top 7 Best Rent with Option to Buy Tips | Brief Comparison

Rent with Option to Buy Tips



Check for Liens on the PropertyMake sure that the owner has the complete title to the home.Ensures that nothing is holding the property owner back from selling.
Determine a Fair Sales PriceResearch other homes in the area to make sure that the home is fairly priced.Ensures that you are not going to pay too much for the home.
Examine the Exit Clause LanguageMake sure that you have a legal out in case you decide not to buy the home.It is important to have an out, so that you can decide not to buy if you change your mind.
Get a Home InspectionHire an inspector to conduct a home inspection.You want to know that the home is structurally sound before signing a contract.
Have an Attorney Review ContractHire an attorney to review the contract in its entirety.Contracts can be complex, so hiring an attorney can save you from entering into a bad deal.
Hire a Professional Real Estate AgentUse a real estate agent to help you through the process.A real estate agent knows the ins and outs of the real estate industry and can help you navigate the process.
Meet with a Mortgage LenderVisit a bank or lending agent to see how much of a mortgage you can be approved for.It is important to know what you will be able to afford and if you qualify for a mortgage.
Table: Top 7 Best Tips for Rent-to-Buy Houses | Above list is sorted alphabetically

Detailed Overview: How Does Rent to Own Work?

When navigating through your home search, have you come across homes for rent with the option to buy? It may seem appealing, the ability to actually live in a home before you buy it.

The important thing about rent-to-own programs is knowing how the process actually works. It is not as simple as renting a home and then deciding you want to buy it. Contracts and leases need to be signed upfront, and there are extra steps beyond a simple renter’s agreement.

With rent-to-own programs, you pay monthly rent to the homeowner. You do this instead of purchasing the home outright. The monthly payment is based on the going rates and the home’s value, and rent is agreed upon upfront.  

 A portion of this monthly payment goes to the down payment of the home purchase, if you choose to buy the home when the contract expires. The rent-to-own real estate contract will generally last between two to five years.

At the end of the term, you can opt to buy the home. When the rent-to-own house contract is up, you can choose whether you want to purchase the home.

When dealing with homes for rent-to-own, if you choose to purchase the home, your monthly payments act as built-up equity toward the purchase. However, if you choose not to purchase the home at the end of the rent-to-buy scheme, the homeowner can keep all of the payments and evict you.

There are both pros and cons to consider with rent-to-own programs. The upfront prospect of putting off a major down payment is enticing, but at the end of the contract, you can find yourself losing your investment if you choose not to buy.

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Check for Liens on the Property

When you are looking at rent-to-buy houses, it is important to check to see if there are any liens on the house.

When you rent with the option to buy, you are signing a contract with the seller that gives you the option to purchase the home at the end of the contract. That is why it is important to ensure that the seller actually owns the entire title of the home and that there are no liens on the property.

A lien is a legal document that gives a creditor some stake in the property. Common liens are mechanic’s liens, judgment liens, and tax liens.  These are used as security for bills, from contractors to taxes, which have not been paid.

The bottom line is that you need to be sure the rent-to-buy homes that you are looking at have no liens that could tie up a sale at the end of the contract term.

Determine a Fair Sales Price

It is also important that you determine a fair sales price before signing a rent with the option to buy contract. A site like Zillow or Trulia can help you research home prices. Throughout the term of the contract, you will be the only person who is able to purchase the house.

However, locking in a sales price on rent to buy homes can be both good and bad. If you negotiate a lower price and the housing market improves while you are under contract, you can be scoring a great deal.

That works the other way, too. When you rent with the option to buy, if home prices drop during the contract term, you might be paying over market value for the home. If you fall in love with the home during this time period, it can be hard to walk away even if there are better-valued homes available.

Examine the Exit Clause Language

When you are choosing rent-to-buy houses, you might be unsure whether you will purchase the home in the end. You might like rent-to-buy homes simply because it allows you to build up your down payment slowly, but some people want to either try out a home, or aren’t sure that their job will keep them there in the long run.

That is why it is important to look at the Exit Clause of your rent with the option to buy contract. You need to ensure that the language allows you to opt out of purchasing the home and that the consequences of that are clearly laid out.

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Get a Home Inspection

As you would when you purchase a home outright, you should get a home inspection completed before signing a rent with the option to buy contract.

A home inspector will check the home thoroughly for any issues. They will look at plumbing, electricity, and structural issues — they’ll even scour the attics and check roof conditions.

Having a home inspection will make you aware of any major issues you may run across before signing an agreement. This is particularly important when it comes to deciding to buy rent-to-buy houses when the time comes.

Have an Attorney Review the Contract

At the end of the day, your rent with the option to buy agreement is a contract and will have legal jargon that may not make sense to you. It is important to consult with an attorney to ensure that you know what you are getting into.

An attorney can help you review the exit clause and ensure that your monthly payments will cover tax and insurance obligations. Without an attorney perusing the contract for issues, you could find yourself in a legal or financial battle at the end of your rent-to-buy contract.

When you buy a house without a rent with the option to buy aspect, you would have an attorney look of the contract. Choosing rent-to-buy houses should be no different.

Hire a Professional Real Estate Agent

Rent-to-buy homes can be a complicated process. Even just finding rent-to-buy homes can be a task. There are many little details to consider when entering into rent-to-buy agreements.

That is why hiring a real estate agent can be a good idea to help you through everything. A real estate agent can help you find rent-to-buy houses, as well as what to look for in houses.

Many complicated details come along with rent-to-buy homes, and knowing how to address issues as they arise and work through the process is the specialty of real estate agents. They are experts in their field and can help you navigate the home search, inspection, and contract process.

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Meet with a Mortgage Lender

At the end of your rent with the option to buy contract, you will obviously have the ability to purchase the home you have been living in. It would be highly unfortunate if you came to the end of the contract term and were unable to secure a mortgage.

Over the years, you will become emotionally invested in your home, and if you are unable to secure funds for the purchase, you can end up in a heap of trouble.

Not only might you miss purchasing your rent-to-own real estate, but you can also be without a place to live and lose the monthly payments you paid over the last several years.

That is why it is important to meet with a mortgage lender before you sign any agreements. If you are told that you don’t qualify for a mortgage, it may change your decision to search for rent-to-buy houses.

Conclusion – Top 7 Best Tips for Rent-to-Buy Homes

When you are going through the rent-to-buy method of purchasing a home, there are many things to keep in mind. Of course, it’s nice to apply monthly payments to accrue a down payment, and the prospect of testing out a home for a few years sounds appealing.

However, many intricate details throughout the rent with the option to buy process can present problems if they are ignored upfront.

Rent To Buy Houses

How Does Rent to Own Work?

For example, if you don’t get a home inspection up front and end up being locked into a two to five year rent with the option to buy contract, you might not be happy. Also, if you don’t thoroughly craft the Exit Clause, you can be facing immediate eviction when the contract expires and you choose not to purchase the home.

When you are going through the rent-to-buy houses process, it is important to ask the following:

  • Will you be approved for a mortgage when the rent-to-own house contract expires?
  • Will you be okay losing the monthly payments if you choose not to buy the house?
  • Are housing prices expected to drop?
  • Can you find respectable rent-to-buy homes in your area?

These are all important questions to ask when you are looking to find rent-to-own homes. The process can be tricky, so hiring a real estate agent and attorney can help simplify things. Having experts in your corner will help ensure that you are not taken advantage of throughout the rent-to-buy houses process.

Though rent with the option to buy homes can help you get into the perfect home, it’s important to follow the following tips to ensure everything runs smoothly for you.

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