As mentioned, having a good Realtor represent your interests is imperative. There are a lot of wolves out there (if you plan on going it alone) and you don't want to sign something that will haunt you later
To find rent to own properties, you often have to use some creativity. Most aren't listed on the MLS, despite some of the other answers below.
If you use a Realtor (a good idea, by the way), your Realtor has to go beyond searching key words. And there are plenty of ways you can find a lease purchase on your own, as well.
There really is no "best" way to find them. It depends on your neighborhood, what you're looking for, what you can afford, your comfort zone. (Are you willing to call up people who are advertising their houses to rent and ask them if they want to offer a rent-to-own? Some people are; some aren't.) So, read through the list and pick 3 or 4 that make sense to you.
Here are just a few ways.
**Using a Realtor**
[Note: If you use a Realtor--which is fine--ask them how they'd find lease-purchases. If they can't come up with more than 1 or 2 of the answers below, find another Realtor.]
--Some rent-to-owns (for simplicity's sake, from here on I'll call them lease-options--in other parts of the country, similar arrangements may be called rent-to-own, land contracts or contracts for deed) are listed in the MLS. Not too many, but some. That's where to begin. However, that's not where to end.
--Search for homes that are listed both to rent and to sell. There may not be any comment that the property is a lease-option, and maybe it didn't even occur to the seller. But a property that a seller is willing to lease, but is also willing to sell is a perfect candidate for a lease-option.
--Search for homes that are listed for rent, but were previously listed for sale. It's likely that the owner was trying to sell the house, but wasn't able to. Now he/she is willing to rent it. That's another perfect candidate for a lease-option.
--Search for homes that are listed for sale, but were previously listed for rent. In today's market, there will be fewer of them, but it happens. Again, another great candidate for a lease-option.
--Search for homes with expired listings. The owners wanted to sell, but weren't able to. Many will consider renting the property, especially if it's vacant.
--Search for homes listed for sale that are vacant. The owners are hurting. They might appreciate the cash flow they'd receive from leasing the property.
--Search for homes listed for rent that are vacant. Again, the owners are hurting. And most owners of single family homes are "reluctant landlords." That wasn't their long-term strategy. Especially if they're bleeding, they may just want to get the property off their hands.
***Not Using a Realtor***
I'm not advising doing it yourself, but you certainly can. Any competent Realtor--and there are many--should be able to find you plenty of lease-option opportunities using the strategies above. However, here are a few other ways to do it.
--Advertise on sites like CraigsList for a lease-option. Advertise under both the rental and purchase areas.
--Go through the papers and look for properties that owners are trying to rent out. A lot of them won't be listed in the MLS. Approach them and explain that you'd like to rent their property for awhile, then have the option to purchase it.
--Look for FSBOs. Same basic pitch to them. You'd like to buy their house, but would like to rent it first.
--Choose a neighborhood you like. Knock on doors. Ask, "Do you know anyone in this neighborhood who might be interested in selling their home?" Often, you'll turn up people before the home is listed. Again, you explain you're interested in buying, just renting awhile first.
--Put cards up in your local supermarket.
--Attend a meeting of your local real estate investors club. It may cost $10 or $15, or maybe nothing. There's usually a time near the beginning of the meeting when investors can stand up and offer or solicit deals. You can stand up, too, and announce that you're looking for a rent-to-own. Specify what you're looking for (number of bedrooms, baths), geographic location, type of property (townhouse, single family home, etc.), maximum amount you're willing to spend on rent and purchase, and anything else that's relevant. Print up some one-page factsheets with details. Make sure you put all your contact information on there. To find your local real estate clubs, go here: here: http://www.creonline.com/real-estate-clubs/index.htm
A realtor that knows the area you're interested in should be able to locate some rent-to-own options for you. Finding the property is one thing but making sure you enter the right agreement is very important. Work with a Realtor that knows what they're doing.
Good luck, Ken.