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
So, you’re out and about your homebuying dream and then you stumble upon this question: what is a condominium? Like, you think you know what is a condo home, but it's so hard to ...
Ownership of property by one individual. ...
Funds that are retained in an account until a certain event occurs. For example, a downpayment on a contract held until full payment is received whereupon the holding funds are credited to ...
Buyer who is acting in good faith, is not aware of any outstanding claims or rights of others to the property, and has given valuable consideration as part of the business transaction. ...
A relatively unknown term, laches or the” doctrine of laches,” means failure to assert one’s rights or a claim in a given matter in time. Failing to take action on a ...
Substituting one party for another in an action giving that party full rights or claims. Foe example, an insurance company pays the insured for a fire loss caused to the home by a third ...
To acquit, exonerate, absolve, or discredit allegations. ...
Danger, hazard, risk, or peril. For example, jeopardizing a piece of property by pledging it as collateral for a loan. ...
The meaning of direct costs implies such expenses that you can connect straight to a particular goods’ or service’s production, manufacturing, and preparation. As opposed to ...
Have a question or comment?
We're here to help.