What does "rent to own" mean?

I am just wondering what it means to "rent to own"

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  • 1 decade ago
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    Since this is in the Real Estate section, I am sure you mean rent-to-own a house. It means that you will pay a monthly lease amount. Sometimes a portion of the payment will be set aside to go towards the purchase price or down payment (it would be lost if you didn't end up buying the home). Usually there is also an "option fee" around 5% or at least a couple thousand dollars that would also go toward the purchase price when the home is bought. After a time, usually 1 or 2 years of leasing, you would make arrangements to get a mortgage.

    These types of arrangements can be beneficial to the person that will be buying the home because they usually lock in the current price of the home, even if the other homes in the area appreciate in value. They also give the buyer time to rebuild their credit or sell a home in another state. The buyer would be wise to make sure it is a home they really want before entering into one of these contracts, have an attorney look over the contract and talk to a mortgage lender to see what kind of time frame they would be looking at to be able to obtain financing.

    These can be beneficial to the seller because they sell the home in the end (if all goes well). If the home isn't purchased, they at least get to keep the "option fee" and any other rents that would have gone toward the purchase. Plus, in either case, they have someone that is more than just a standard renter. The person living there may be more inclined to take care of the place because they think they will own it in the end (which should be the goal for all involved).

    There are some scammers out there, so beware. Some are just in it for the profit and really don't care if you end up owning the home in the end or not. In my opinion, it would be better to ask people that are already trying to sell their home to see if you could work out a deal.

  • 3 years ago

    2

    Source(s): Rent-To-Own House - http://RentToOwn.trustdd.com/?Edcp
  • 3 years ago

    Rent To Own Definition

  • 1 decade ago

    You rent the item for an extended period (often a couple of years of weekly payments), and if all rents are paid in full on time, you get to keep the item. If you are late with a single payment, they take the item back. This is terribly expensive. You can buy a better item for as little as one-fifth of the rental payments if you save up and pay cash in full.

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  • 4 years ago

    It is easy, your rent a house (or any different item, but usually a house) and part of your rent is going to the purchase price of this house.

    If you go for "rent to own" house, I strongly suggest you to check this portal with the biggest selection of rent-to-own houses - https://bitly.im/RentToOwnListing

    hope that helps

  • 1 decade ago

    On a house, it usually means that if you rent it, part of your rent goes to the purchase price of the house, if you ever buy it. Sometimes, it means it's a land contract, which is basically you paying your mortgage to the current owner at a set interest rate. There are variations on how they do it.

  • 1 decade ago

    Rent to own means while paying for rent of products/services, this entitles you to own at the end of a set time.

    Source(s): I have rent to own furniture and house.
  • Anonymous
    1 decade ago

    you could rent a house and have an Option to buy if you want too,this must be put on the rental agreement.

  • Anonymous
    4 years ago

    RE:

    What does "rent to own" mean?

    I am just wondering what it means to "rent to own"

  • 1 decade ago

    It means to pay on something till you pay tha full amount that it costs then you own it!

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