Rent to Own Your Home - Does it Work?


Visitors: 196

Rent to Own is a partnership between a Tenant and a Seller/Landlord.

Sellers can be Private Sellers (FSBOs) or Listed with Real estate Agents or Landlords fed up with Tenants and Toilets.

Here are reasons that the OWNERs want to consider a Rent to Own Tenant, especially in a Buyer's Market (where there are an oversupply of homes available and time to sell is over 180 days in some areas):


FSBOs (for sale by owners) want. . . .

  • SPEED (fast closing)
  • Top Price
  • Little costs out of pocket
  • NO AGENTS to pay a commission
BIGGEST HURDLE: When dealing with FSBOs, they are worried about getting financing for their NEXT HOME.

SOLUTION: They get a BLANKET MORTGAGE (a single mortgage that covers more than 1 parcel of real estate).

  • Their old home is now an investment property.
  • Their bank will consider 75% (approx) of the rent to own income to go toward “ability to pay" income for the next home loan
  • I instruct you to get market rent plus 10% to 30% more in a non-refundable option payment
  • - now you can show the lender that 75% is a great number :)

LANDLORDs want. . . . . .

  • LONG leases
  • Top Rent
  • Little costs out of pocket (maintenance)
  • NO damage
  • NO late payments
BIGGEST HURDLE: When dealing with LANDLORDS, they are worried about getting their money on time and hassles from tenants.

SOLUTION: Once the Tenant-Buyer learns of the PROBLEMS and CONCERNS the landlord has been experiencing, and show a win - win solution (long leases, paying for minor maintenance), this is great news for the landlord.



These Listed Sellers want. . . .

  • fast closing
  • top price
  • no funny buyers not getting financed at the last moment
  • not paying for 2 properties (new home and home that has not sold yet)
BIGGEST HURDLE: When dealing with LISTED SELLERS, they are worried about the contract they have from their Realtor - Agent.

SOLUTION: Many times they can get released from their contract by writing a letter requesting that the contract be canceled and any sale due to the owner's marketing will not result in a commission being paid to the agent. Or they can pay the commission to the agent when the house sells (in 12 to 36 months).


Next article will be- How does a Renter Find a “Rent to Own" Owner to help me own a home?

Brian Gibbons has assisted hundreds of Sellers, Landlords and Tenants successfully create Rent to Own Agreements since 1986.

He can be contacted through his blog at


Article Source:

Rate this Article: 
Should I Buy a Home Or Rent, Which is Better?
Rated 4 / 5
based on 5 votes

Related Articles:

Should You Use a Lease/Purchase (Rent to Own) Approach to Sell or Rent Your ..

by: Bob Pappas (November 03, 2005) 
(Real Estate)

Can't Rent a Work Zone

by: Terence Ward (May 20, 2005) 
(Finance/Leases Leasing)

Owners Guide to How to Rent Your Vacation Home Helpful Tips to Buying and ..

by: Nick Hargreaves (July 02, 2008) 
(Real Estate/Property Management)

Make the Most of Office Rent London with a Rent Review

by: Phill Lorenz (August 13, 2010) 
(Business/International Business)

Is It Better to Rent or Buy a Home?

by: Cina Tucci (July 25, 2011) 
(Finance/Mortgage Refinance)

Rent Out Your Vacation Home

by: James Hussher (July 26, 2008) 
(Real Estate/Leasing Renting)

What to Know Before You Rent a Vacation Home

by: Kathryn Lively (November 28, 2006) 
(Travel and Leisure)

Should I Become a Home Owner or Rent?

by: Mary Wise (July 21, 2006) 
(Real Estate)

Rent a Home for Vacation

by: Guy J Morris (April 16, 2008) 
(Travel and Leisure/Vacation Rentals)

Should I Buy a Home Or Rent, Which is Better?

by: Hamed Mahmood Salehi (June 19, 2008) 
(Real Estate)