What Is a Lease-to-Own Purchase?

A lease-to-own purchase is a common real estate transaction. Here are the basics of a lease-to-own purchase and how they work.

Lease-to-Own Purchases

Some property owners sell their homes through this sort of transaction. If you found a house that was offered as a lease-to-own, this means that you would be able to rent it for a certain period of time and then eventually purchase the house. In most cases, you will have to pay some type of option money at the beginning of the agreement to reserve the right to purchase the house.

Negotiating the Contract

You should also understand that everything about this type of deal is negotiable. You can negotiate how much money is required to put an option on the house. You can also negotiate how long you will have to rent the property before purchasing it. The amount of rent that you pay is also up for negotiation.

In most cases, you will also come to an agreement, at the outset, as to how much you will pay for the house whenever you purchase it. This will work in your favor if the value of the house increases during the rental period.