Pros and Cons of a Rent-to-Own Home

Deciding to purchase, or rent-to-own is a life changing decision. Going the rent-to-own route, instead of purchasing traditionally, requires careful consideration of all options available to you. Rent-to-own contracts are binding, and getting into a contract that does not benefit you down the road can lead to future frustrations. Before you jump in to a lease-to-own agreement, weigh the below advantages and disadvantages carefully.


  • Many buyers choose a rent-to-own because of past credit problems that may be preventing them from acquiring a mortgage loan. A lease-to-own option gives buyers the opportunity to rebuild their credit while they live in the home.
  • If you find something seriously wrong with the house, you may have the ability to walk away from the contract. This is not something that can be easily done with traditional home purchases.
  • During the rental period, the owner is still responsible for repairs, upgrades and regular maintenance of the home, which allows you to live there stress-free while saving up funds for the purchase of the home.
  • A rent-to-own locks in the purchase price at the time you sign the contract. When market values rise, your home will be an affordable option compared to other homes around it.
  • Choosing to rent-to-own gets you in the home immediately, and allows you to live there as if it’s your own while you build your credit history.


  • Buyers still need to make a down payment (known as a deposit or option fee). This fee is generally a previously agreed-upon percentage of the selling price of the home. This money rolls into the homes purchase price, but can be a significant investment of funds. Option fees are usually 3% of the home’s value.
  • If you decide not to purchase the home, you will lose your option fee (or deposit) and any rent credit money applied toward the house.
  • You need to review contracts carefully. Some contracts will state that any late rent payments are not applied toward your credit for the purchase of your home.
  • You have to trust the seller carefully. If the owner fails to pay the mortgage, and the home forecloses, the buyer will be forced to move.

If you have decided a rent-to-own is the best option for you, browse our collection of lease-to-own home listings to find opportunities near you.