Rent-to-own in housing works much like a car lease or a rent-to-own furniture deal. The bottom line -- you agree that at a specified time period you will have the choice to buy the home at a set price. However, you, the buyer pays the seller a one-time, often nonrefundable, upfront fee called the option fee, option money or option consideration. This fee gives you the option to buy the house by some date in the future.
“Renting a home or condo in certain cases makes sense, especially when the tenant is short term or was relocated for business to another community. They can write off a large portion of housing if relocated for work,” says Jim Angleton, president of AEGIS FinServ Corp™.