Rent-to-Own

Intermediate 🏠 Real Estate

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

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