The Difference Between Renting And Rent To Own

Rent money is lost forever.

A portion of your rent goes towards your down payment or the price -
kind of like a savings account. This is called a rent credit.

Your landlord does not want to sell the home.

You don't so much have a landlord as you have a seller whose intent is to sell the home to you.

Purchase price is never discussed, since the home is not for sale.

The price you will be buying the home for is set at the beginning of the lease in the form of an option to purchase.

Landlord is responsible for all repairs.

You are responsible for the repairs since you are a home owner to be. This is the house you want to buy and therefore you are treated like a home owner.

Rent is set at market rates

Rent may be slightly higher than market rates since a portion of it is going toward the down payment or reducing the sales price. This allows you to build equity while you are getting ready to buy.

A security deposit, first month's rent and sometimes the last month's rent will be required to move in. The security deposit is refundable in case of no damage to the home.

A down payment, called "option consideration", will be required. This will lock your option to purchase on the property, and will go toward the purchase price as a down payment. This is not refundable if you choose not to buy by the end of your lease. First month's rent, and sometimes a security deposit will also be required.