Lease to own, also known as rent to own or lease-purchase, is an agreement where a tenant pays rent to a landlord and in return, they are given the right to purchase the property at a specified future date. It can be a great option for those who want to own a home but aren’t in a position to secure a mortgage at the moment, or those who want to try out a home before they commit to buying it.
With a lease to own contract, the tenant will typically pay an up-front fee such as an option fee or down payment. This fee is usually refundable if the tenant doesn’t end up buying the property.
The lease agreement will specify the amount of rent the tenant must pay each month, as well as the amount of time the tenant has to purchase the property. In some cases, the lease might include a clause which states that rent will increase each year. At the end of the term, the tenant can either buy the property or extend the lease.
Lease to own can be a great option for those who don’t have the money for a traditional mortgage but still want to buy a home. It allows people to move in right away and start building equity in the property, plus it provides more flexibility if they decide they don’t want to buy the home after all. It’s important to remember, however, that a lease to own agreement is legally binding, so it’s important to work with an experienced real estate professional who can guide you through the process.