Understanding Rent-to-Own Homes
At its core, a rent-to-own agreement is a hybrid between a traditional lease and a purchase contract. In this arrangement, prospective buyers lease the property for a predetermined period, typically ranging from one to three years, with the option to buy the home at the end of the lease term. During the rental period, a portion of the monthly rent may be allocated towards the eventual purchase of the property, serving as a built-in savings mechanism. Additionally, the purchase price is often locked in at the onset of the agreement, shielding buyers from potential market fluctuations.