How Rent-to-Own Real Estate Works

Rent-to-own offers two main agreement types: a lease option agreement where tenants have the choice to buy, and a lease purchase agreement where they're obligated to buy at the end of the term⁠

The typical structure includes an upfront option fee (1-5% of home price), monthly rent payments with a portion going toward the future purchase, and a predetermined purchase price⁠

This strategy is particularly beneficial for people who can't qualify for traditional mortgages due to insufficient down payment, low credit scores, or non-traditional income sources⁠