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
Property that is zoned for industrial use, including manufacturing, research and development purposes, factory office and warehouse space, and industrial parks. ...
The term foraging comes from the old germanic language, which passed through Old French “fuerre” and “fourrage” and it means the search for wild food resources. ...
Removal of a tenant from a portion of a rented or leased premise. ...
Flaw in an otherwise proper title. A title obtained through error or fraud without proper signature or consideration or other improper action. A defective title is null and void having no ...
yard lumber about 2 inches by 8 inches. ...
The definition of the price-to-rent ratio is very important for real estate investors. This ratio is a measurement for the affordability of a particular rental property and tells investors ...
Standard days when an organization is open and conducts business. Business days exclude weekends and holidays. ...
The person identified to receive the benefit of property held in trust. ...
Land expansion resembling a star. The starts center is the city, and major thoroughfares going away from the city are depicted. ...
Have a question or comment?
We're here to help.