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
A mortgage loan is nothing more than a real estate debt instrument. Acquiring a mortgage loan is the most common method of financing a home in America. The benefits are tremendous and ...
Insurance contract providing coverage for risks primarily associated with negligence and acts of omission associated with third-party injuries or property losses. Property and casualty ...
The appraisal approach is used to estimate the value of an asset, based on various factors to reach the closest educated guess of the asset. While an appraisal approach does consider the ...
Insurance affording protection against losses due to damage to or destruction of property or contents therein. Insurance protects assets and any future income thereon from loss, such as a ...
Six-mile-wide column of land running north-south in rectangular survey system ...
“What is Rent Control?”, you ask.Rent Control is how some governmental policies that prevent the Landlord from abusively raising the rent are called in the real estate ...
Evaluation of housing requirements based on family size, ages, occupations, marital status, and other population characteristics. ...
Stigmatized property is a property that home buyers might back off on closing a deal due to factors that are not related to the property’s price, structural/aesthetic conditions and ...
(1) Craft of one who fabricates fine cabinets, furniture, or woodwork. (2) General term describing interior wood finish work performed by cabinetmakers instead of carpenters. (3) Built-in ...
Have a question or comment?
We're here to help.