Definition
Renting with an option to purchase later, effectively allowing tenants to try homeownership before committing.
Example Usage
The rent-to-own agreement allowed her to rent for two years with the option to buy at a predetermined price.
Origin
Alternative financing structure from the 1970s
Fun Fact
Rent-to-own agreements frequently fail when market values drop below the predetermined purchase price.
Source: Alternative real estate financing
Related Terms
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See “Rent-to-Own” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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