ReSET Blog
Blog · November 16, 2022 · AUTHOR: Stanley Bawalan

What Are Rent-To-Own Homes and When to Opt for One?

Rent-to-own homes are ideal for home shoppers who are not yet ready to purchase a home but want to in the future. If you’re looking to purchase a home and you think testing the waters first is crucial, rent-to-own might be the best option for you.

Not only do they allow you to get into real estate without all the upfront costs, but they can also be a great way to build credit history and get into your first house. 

How does rent-to-own work?

Rent-to-own homes are essentially a hybrid of renting and owning. You'll pay rent every month, but you'll also have the option to buy the home at any time during your lease. This means that when it comes time to purchase a property, you don't have to go through all the stress of a traditional mortgage. You'll be able to move into your home and start building equity immediately.

Rent-to-own homes are also a great option for first-time buyers who don't have good credit or a down payment saved up yet. Rent-to-own offers flexibility so that you don't have to worry about whether or not your credit score is high enough—you just need to be able to afford the monthly rent payments.

Who can qualify for a Rent-To-Own home?

To qualify for a rent-to-own home, you will need to prove that you can afford it. It’s important to have a steady source of income. The lender will also look at your history of paying off debt and any other loans that you have.

What to look for in a Rent-to-Own Home

You should check to see if the home has been updated in the last few years. The updates should be more than just cosmetic, though this is important as well. Updates can include new flooring, appliances, and fixtures. 

You should also look for a home that has been inspected by an inspector who will let you know about any issues with the house before you buy it. This way, there won't be any surprises when it comes time for closing on your home purchase!

Should you take the leap and rent with the option to buy?

Pros and Cons


  • Helps build credit - Renting with an option to buy means that you'll be making monthly payments on time and in full each month. This will help build up your credit score over time which can lower your interest rate if or when you decide to take out a mortgage later on down the road.

  • Renovate the property with a stipend- With a mortgage broker, you’ll have the option to renovate a rent-to-own property for free. However, if the total renovation cost exceeds the agreed amount, you’ll have to pay for the excess. Still a good deal if you find a broker that gives out a stipend. 


  • You could end up paying more than needed - The goal here is saving money so it's important that if this is something that interests you, go into it knowing exactly what type of house or apartment complex (if any) will fall within your budget range before signing anything official; otherwise there might be some sticker shock later down the road!

Key Takeaways:

This may be the only excellent way to get into your dream home if you don't have enough money for a downpayment. You get some, but you're not entirely losing.

Rent-to-own homes can be a great way to build equity while still being able to pay off other debts such as student loans or credit card bills. 

If you’re looking to buy, sell, or rent a home, SetSchedule’s Concierge Services will connect you to a real estate agent who best fits your needs.

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