Is a Rent-to-Own Property Right for You?

by Jackie Davis 04/13/2025

One of the many options new homebuyers may encounter in their search is a rent-to-own agreement. These agreements allow the prospective buyer to rent a property with the option to buy it down the road. There are many types of rent-to-own agreements, each with their own rules and exceptions. Here is a breakdown of the major advantages and disadvantages of this type of contract you should consider.

Rent-to-Own Pros

  • A Good Option for Bad Credit - If you can’t qualify for a home loan or other types of financial help, rent-to-own agreements might be an excellent choice. With regular on-time rent payments, you can even improve your credit score over time while renting. This makes it easier to get loan approval when it’s time to buy the home outright.

  • Lock in Purchase Price - If you’re looking for a home in an area with rising property values and prices, renting-to-own may give you the option to buy at the current purchase price and save a bundle. This way you can reserve your spot in a hot market affordably.

  • Test Out the Property & Neighborhood - Renting-to-own gives potential buyers the chance to try out a home before committing to buying it. This gives you time to learn about the property and the neighborhood and can give you greater peace of mind in your decision.

Rent-to-Own Cons

  • Possible Financial Loss - If you decide not to buy the home at the end of the rental period, you’re out of a considerable amount of money. You won’t get a refund of your investment and will need to begin the process all over again with a new property.

  • You’re a Tenant, Not an Owner - Since you’re technically renting the property, you face all the potential woes of the renter lifestyle. This can include minor annoyances like rules about customization and remodeling but also potentially serious scenarios like the landlord defaulting on their mortgage and losing the property through foreclosure.

  • Unpleasant Surprises - Renting a home before buying it will help you learn about potential issues with the property and home itself, like neighborhood noise, plumbing problems and more. However, there are some things you won’t learn until you actually buy the property, such as problems with the title.

Rent-to-own agreements can be an excellent option but also come with risks. If you’re considering renting-to-own, consult a financial advisor or real estate attorney to help you make the smartest choice for your situation.

About the Author
Author

Jackie Davis

Welcome to Jackie Davis and Company. If you have navigated this far, we thank you and would like to share how we differ from other teams and agents. We work tirelessly and are committed to providing 100% customer satisfaction. We recognize, listen, value, and appreciate your goals as you move towards listing or selling your home. As Listing Agents we continuously integrate new and advanced technology to promote your biggest asset. Our strong negotiation skills are invaluable for getting you the best price for your home. As the Buyer's Agent we pride ourselves on being fully educated in our local markets. While focusing on integrity and honesty we will provide you with the highest level of professionalism and analysis. We are proud that this hard work has earned us recognition as top 1% both company and state wide in the industry. Achievements * 1st Quarter 2017 Leading Sales in Fairfield * 2017 February Leading Sales Team * 2017 March Leading Sales Team * Chairman's Elite representing the Top 1% Agent at William Raveis Nationwide & Fairfield County * Over $45 million Listed & Sold in 2016 * Over $30 million Listed & Sold in 2015 * 99% List to Sales Ratio (higher than market average) * 75 Average Days on Market (less than market average) * Jackie Davis Promoted to Sales Vice President 2016 * Raveis Award of Excellence every year * Exceptional Customer Service Award every year * Top Units Sold Team October 2016 * Top Customer Service October 2016 * Top Mortgage Support September 2016 * Top Selling Team January 2016 * Top Mortgage Support August 2015 * Top Selling Team Feb 2014 * Top Producing Team Jan 2014 * Top Selling Team Dec 2013 * Top Selling Team Nov 2013 * Top Producing Team Nov 2013 Professional Specialty Innovative Marketing and Technology equals proven sales. Our team of licensed professionals is ready to serve. We handle: Sellers & Buyers Exceptional Properties Investors Waterfront & Beach Area Homes Country & Equestrian Properties New Construction & Land Relocation Professional Association National Association of Realtors Connecticut Association of Realtors Greater Fairfield Board of Realtors Consolidated Multiple Listing Service Community Involvement PTA committee member for past 14 years from elementary through high school PTA Board Member for 4 years Shoff Darby Advisory Scholarship Board member past 5 years Committee member for Cancer Care of Norwalk past 10 years Volunteer Habitat for Humanity Operation Hope coordinator for elementary and middle schools, last 3 years Volunteer for a variety of town sports teams, that my daughters participate in The County Assemblies Board Member The b-Cause Foundation Board Member- a non-profit organization whose mission is to educate children to recognize neighbors in need in our local community. Wakeman Boys & Girls Club- Fundraising Committee Member Committee Member for Cancer Couch Fundraiser the Cancer Beat 2016 Near and Far Aid Volunteer Education BA from Merrimack College Personal Fairfield resident for 39 years Currently reside in Fairfield Beach Area Married 27 years Four daughters currently in & have graduated Fairfield Public School system Areas Covered Fairfield Southport Westport Weston Norwalk Trumbull Easton Stratford Shelton Milford Stamford Bridgeport