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
The amount of rent a property could command in the open market. See also market rent. ...
A method of brick construction where the bricks are laid with their sides facing outward. ...
Has not been registered on the companies books. It belongs to the person holding it. See also bearer bond; bearer instrument. ...
Regularly, subsequent means something which occurs at a later date. In other words, a subsequent event follows a prior occurrence. For example, new circumstances arise after a contract is ...
Provision guaranteeing the return of title to a mortgagor upon satisfaction of a mortgages conditions and terms. Causes the discharge of a mortgagees estate interest in a property. ...
Are you speculating what a spec house means? (sorry for the lousy pun) The textbook spec (or speculative) house definition is “one built on an experimental basis, without an order ...
percentage relationship of a specific part of property to the whole property. An example is the square footage of one office to the square footage of all offices in an office building. ...
Insects that destroy the support wood in the structure of a building. Termite inspection should be periodically performed to detect their existence. If an infestation is confirmed, the ...
Payment made instead of taxes, For example, a tax-exempt institution, such as a state government complex of buildings, may make an offsetting in lieu of tax contributory payment to the ...
Have a question or comment?
We're here to help.