The concept of 'rent to own' had been used in the past for people that couldn't get the downpayment in order to purchase a home outright. There a few factors included in a 'rent to own' agreement. One is a standard rental agreement. This would include a security deposit, length of time, rental amount etc. all defined as any other rental agreement is defined. The second part is the option agreement. The rent to own option is defined for a certain amount of time, during which you could exercise this option to buy, at a specified price, and some portion of the monthly rent MAY be applied to the purchase price, (not always). For this option, the buyer/tenant would often provide an option amount of some significant amount ($2,000-$10,000?) that would be non refundable should they decide not to buy the property.
When you look at today's market, I'm not sure I've seen many situations that would make this a good alternative for a buyer/tenant. One, the price of homes are declining, and over the length of the time the home may be worth less than the agreed upon price. The option amount may be cost prohibitive. You may find a better alternative is to just rent now and buy later, or buy now using many of the FHA backed loans available. Paying an option amount in a declining market is probably a waste.
For sellers today, they expect that a tenant who has a rent to own contract, will maintain the property better, considering that they see it as their own, and sometimes they are willing to pay more in rent. Last, some feel that they are hedging their bets against a further decline in property values.
As for Elk Grove, there are so many wonderful buys in Elk Grove. I would seriously look at your financial situation and see what is the best alternative for you. Rent to own is one alternative. I'm just not convinced it's the best in this market.
Great question Moe!