How to Set Up a Rent-to-Own Home Agreement

A rent-to-own lease agreement works a purchase agreement into the standard rental agreement involving a property. Rent-to-own agreements can be set up several different ways, depending on whether the owner is interested in owner financing of the home or prefers that the tenant seeks his own financing once the lease agreement ends.

Instructions

1. Talk with your landlord to see if he is open to setting up a rent-to-own agreement instead of a standard lease agreement.

2. Agree on terms such as the purchase price of the home, how long you have before you need to secure financing on the property, the amount of monthly rent that goes toward the down payment or mortgage principal and whether you can get out of the rent-to-own agreement if you do not like living in the home or area.

3. Write a contract that includes all of these terms, along with standard lease agreement terms such as what happens if one of the parties breaks the lease, who is responsible for repairs before the purchase and the rules and regulations of living in the rental property. Sign and date the contract, and have the landlord sign it as well. Keep a copy of this agreement.

References

• Bankrate: Rent-to-Own Deal Can Be Risky