Everything You Need to Know About Rent-to-Own

Good and bad. This is what you have to know, and the best part? This isn’t the H.O.P.E. Program selling you a story or promoting the latest rage in real estate, rent-to-own. We’re simply giving you all the pros and cons about what many know is called RTO.

The Benefits of Rent-to-Own and Why You Might See an Option in It

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Surprisingly, the entire market’s sort of bipolar on the idea of the rent-to-own home. Somehow the resource continues to grow strong given the certain flexibility imbued on the buyer and the seller. But what exactly are those benefits?


For starters, RTO homes always focus on a fixed price. It means when you sign that rent-to-own home contract, you’re locked in on that price regardless of what trends in the real estate market years later. Home prices may go up, but since you signed that agreement to buy the home after the rent period, you get that price no matter what.

Obviously the rent-to-own home benefits the seller (or the homeowner) in a big way. It opens up the possibility of more prospects interested in approaching the home as an opportunity. In a way, it’s like offering a land contract. No credit check. And oftentimes, unlike land contracts, buyers don’t even have to put in a down payment.

However, There Are Some Major Downsides to Rent-to-Own

You never know what the future holds as you rent an RTO home. Why? What happens if you decide you don’t actually want to buy it later down the road? Be sure of what you’re signing. When that contract is signed, you’re basically agreeing to buy the home after the period of 3-4 years of making rent payments, and here’s why you have to be absolutely positive:

rent to own home-2RTO landlords will generally charge more on a lease with a purchase option compared to a standard rental agreement for good reason — that extra cost goes toward paying for the home. You see the benefit, obviously? The catch is that means you better buy that home after your lease option period arrives. Or else that extra cost on your monthly rent for all those years basically goes to nothing.

To make it even worse, there really is no actual guarantee that you’ll be able to buy the home after your renting period is over and you exercise the option to buy. You still have to go through the entire home sale proces; chances are good there still will be a down payment required; and, of course, your credit needs to be up to par to qualify for that home loan.

Even the fixed price can be a drawback, and here’s why — what if you enter that RTO agreement while home values have climbed? Keep renting the home, and by the time you enter lease option time, the cost of the home might actually be more than the value. Somewhat of a loss for the potential homeowner, don’t you think?

All Things Being Equal, It All Depends on the Deal and Situation

RTO might be a great venture for you — whether you’re a home buyer or home seller. Or chances are you’ll find something better in terms of a deal as long as you’re well-informed of your resources.

The good news is the H.O.P.E. Program has those resources. Rent-to-own or not, the decision’s clear — contact us and see what your options are. Because everyone knows that the secret weapon of this real estate market is that you have options. Review them.