Rent With Option To Buy
Definition of "Rent with option to buy"
Sometimes a landlord agrees to implement within the rent contract the possibility of the tenant buying the house at a certain price, by a certain date. It’s what’s called in the real estate world as a Rent with Option to Buy or a Rent to Own.
A rent with option to buy is a lease with a purchase option - not obligation. So it’s a great opportunity for the tenants, who can make a “test drive” of the house getting a feel for the neighborhood, its community and services before making a big financial commitment. It also warrants them time to save more money and get rid of certain impediments that could make a house sale go south.
Also, and super important in volatile markets, a rent with option to buy stipulates the selling price at the beginning of the relationship. When time comes to exercise the option, if the prices went up… too bad for the landlord. Tenant’s paying exactly what was agreed early on. But hey; if prices went down: tough luck, Tenant. Landlord gets the money!
Rent with option to buy is good for landlords as well, since they are earning rent money throughout the relationship and, in the end, might even sell the house.
Real Estate Tips:
Take a look at our blog further explaining Rent to Own Properties.
Discover more real estate terms in our Glossary!
And if you’re looking for an agent, try The OFFICIAL Real Estate Agent Directory®.
Popular Real Estate Terms
Haven’t you ever paid a bill a few days after the due date? It happened to all of us, not necessarily because we didn’t have the money, but because we simply forgot about it. A ...
Mock closing; all information is available prior to an actual closing in order to insure all documents are properly executed by the appropriate parties. A preclosing is normally used only ...
Removal of a tenant from a portion of a rented or leased premise. ...
Expiration of a lease or insurance policy by mutual consent of the parties, also to give up. ...
Platform erected on a roof in some New England homes having a view of the sea. It was said widows of lost seaman would walk on the platform looking out at sea for their husbands to return ...
Offering price. ...
Condensed appraisal report covering the major items. ...
Mortgage where the lender pays a borrower a fixed monthly payment based on the value of the property. It allows the borrower to receive monthly receipts against the equity in his or her ...
Also called price control or rental control. A controlled or administered price that is set for property by a federal or local agency typically in extraordinary circumstances. ...
Have a question or comment?
We're here to help.