Rent to Own is more urban myth than reality. There are only two situations where someone like yourself will encounter "Rent to Own" and neither is desirable.
In the first situation the Seller has been unsuccessfully trying to sell their property often for a year or more and they cannot find a buyer. The reasons for this can be many such as; high crime rates, terrible condition of the property, stigmas the house may have such as some one murdered in the home, or a home used as a meth lab for example. There are others but I'm sure you get the idea. In this case the seller is so anxious to sell their willing to do anything, but Buyers should ask themselves why would I want to inherit this Seller's headache?
The second situation is in my opinion actually worse: it's when very savvy Sellers set out to intentionally take advantage of less savvy Buyers. They never have any intention of the Buyer owning the home and the contract they prepare almost ensures that a Buyer will never be successful in meeting the terms. Their intent is to get above market rental income with the promise that one day you'll own the property and if by chance you actually were able to fulfill the terms of their agreement their OK as they got well above market price for the property, but what happens 95+% of the time is that they simply take the home back when a buyer fails to fulfill one or more of their contract terms and they then repeat the process. I've been active in all aspects of residential real estate for more than three decades and can honestly report that I have never once met a single buyer who was successful with "Rent to Own"
Right now we're in a strong sellers market, and frankly there's no reason any legitimate seller would offer a Rent to Own option, that said it's very possible given today's low interest rates that you may be able to buy a home. The best way to find out for certain is to speak with a reputable mortgage lender.... more
Kip and Shelly, You have just become another victim of the Dobbs/Franks act. The portion that become effective Jan 1, 2014 essentially eliminated this segment of the real estate market. ANY financing arrangement with an 'occupant buyer" (Rent to own and Lease Option fall into this category) impose huge requirements of the lender/owner that will result in the ONLY option available to you is rent or buy through a bank. Now, I can not say this is a bad thing. RTO and LEASE OPTIONS were extremely predatory and engineered to separate the naive from their money. Now, this predation is more difficult to do. But, folks will figure out a way. YOU, however, should be spending your energy, both physical and mental, on becoming qualified for a home mortgage. Any bonefide RTO will be purely rend with a companion saving component through a CD. YOU will never gain a control interest in the property.... more