How Rent-to-own Homes Work

Risks and Benefits to Buyers


For many people, a home will be the biggest purchase they ever make. Both buyers and sellers should carefully weigh their options before agreeing to any binding contract.

Let's look at some advantages and disadvantages for buyers:

• Buyers have time to build income and repair their credit history as they rent the house.

• Depending on the agreement, renters can walk away if they find something seriously wrong with the house. Although the renter will lose the option fee and all their rent credit money, that amount will be much less than if the renter had bought the house outright and tried to leave it later.

• Buyers still have to pay the upfront option fee. It's usually a percentage of the agreed-upon selling price of the home and is often only slightly more than the typical rental security deposit on the same home, but gives you the option to purchase the home.

• If the buyer is late on a month's rent payment, most agreements void the rent credit for that month. The buyer in the rent-to-own agreement must pay on time, every time. Pay your rent on time, or early, and you'll earn the benefit of rent credit toward the purchase price of the home. It's like putting hundreds of dollars in a savings account every month simply by paying your rent on time.

• At the end of the rental period, the buyer still may not be able to buy the home for the same reasons they couldn't buy at the start of the lease: bad credit, insufficient down payment, not enough income. The seller can't fix these issues for you, you have to decide to make changes to improve your life, then follow through with them. The rent to own contract gives you time to address these issues, and a powerful motivation to improve your situation.

• Major repairs -- like replacing a furnace or roof -- are usually the responsibility of the seller during the rent to own option period. But the minor repairs that used to be somebody else's problem in a rented apartment often become the responsibility of the new buyer, even during the rent to own option period. Home ownership has it's rewards, but it also has it's responsibilities. When you rent to own, you often take on homeowner like responsibilities, such as minor repairs up to $150.

-- by Sarah Siddons and Chris Opfer

We have a lot of Rent to Own homes available now. Call or text 630-697-4500 or email Adam @ MyHappyHomeSolutions.com for more info, or visit our website at MyHappyHomeSolutions.com to watch video tours and get more info. Please note that not all available rent to own homes are shown on our site. Sometimes they are rented before we even have a chance to post them, so get on our mailing list to stay informed about all new properties!