Rent to Own Homes: How does the Process Works

Part One: Entering into a Rent to Own Program – Start with the end in mind.

There are a number of steps required to participate in a Rent to Own program. To participate in a successful Rent to Own program you need to know a couple of very important things. It’s all about the Exit, if you are unable to Exit the program at the end of your term, better you do not enter the Rent to Own Program. Some property first type programs, this is where you have a choice of the homes the Rent to Own program provides. There are some pros and cons with this approach, we will probably discuss this in another post. 

However, there are some companies, who leave it up to you to get ready to Exit about 3 to 5 years in the future and some companies would prefer if you can’t exit since they can trigger a clause which will evict you from the home, taking your down payment and your credits. We have seen one client who came to us from another company asking if we can help him to get out of a Rent to Own program. He has been in the program for more than 10 years – this is unacceptable, he simply did not get the help he needed to Exit. 

When you Exit, you are prepared to qualify for a Mortgage which means you have the proper credit capacity and the affordability which can sustain a mortgage payment and the financial institution can provide you 90% or less of your Mortgage. Sadly, many participants in the Rent to Own program can’t exit  

So what are your options? This will depend on the agreement you sign when entering the program. Make sure you get Independent Legal Advice, insist on it! Know your options and know the rules. If a company does not support you during your Rent to Own program, simply walk away.