How does "Rent-to-Own" work for real estate?
The most typical Rent-to-Own senario is called a Lease Option. This is where you find a property that the seller does not want to, or cannot, sell the property right now but does want to sell eventually.
You then negotiate a lease price, the more credit you want of that price the more it will cost you monthly. There is almost always lease option money. The amount is negotiated between buyer and seller but it usually is not less than $5000 and probably a lot higher on most deals.
The lease option money is usually not refundable and is usually released immediately to the seller. This is the benefit for the seller to "hold" the property for you and not just sell it to anyone when the time to sell comes.
There is another type of rent-to-own process- it involves equity partners. Be careful of these they are not always legitmate and can be very costly in the end.
Always consult with an Real Estate Broker or Attorney before taking on anything like this.
A rent to own program is a home ownership program in which you rent a home for a period of time to save money, improve your credit and ultimately purchase the home from the seller. The tricky part is that every rent to own home deal is different! It's vastly different than buying a home.
It's sad to say but, many other Rent to Own programs don't want you to actually end up owning the home! They simply want to make their money by taking your rent option money up front and turning you into a long term renter. If that's what you are looking to do - you should just keep renting... YOU'VE GOT TO UNDERSTAND: MOST RENT TO OWN PROGRAMS/INVESTORS DON'T CARE ABOUT YOU - IN FACT THEY DON'T EVEN CARE IF YOU OWN THE HOME AT THE END BECAUSE THEY MAKE MORE MONEY IF YOU END UP NOT OWNING IT.