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How Does Rent to Own Work?

First, it is important for you to know that there are numerous terms used to describe a “Rent to Own” transaction.

The most common are:

  • Rent To Own Homes
  • Lease To Own Homes
  • Lease Option

Basically, the way it works, is you rent a property with a traditional lease agreement, rent to own homes, lease to own homes, lease option, option agreement, option period, unable to qualify, option to purchase contract, option fee, rent credits, rent to own road map, critical road map, contract for deed, rent to buy, rent buy, rent to sell, lease with option to buy, lease buy, lease purchase AND at the same time you also sign an option & purchase agreement.

The Option Agreement states a purchase price the Rent 2 Own Buyer and Seller agree on.

The agreement also details the period of time the Seller is willing to give you to purchase the house. This length of time is called the Option Period and it is usually 12-24 month, but can be longer based on what you negotiate. At this point, it is then the Rent 2 Own Buyer’s responsibility to qualify for a home mortgage to purchase the home before the expiration of the Option Period.

What If I am Unable to Qualify In Time?

If you are unable to qualify to purchase the home during the Option Period, one of two things usually occur:

  • The Option to Purchase Contract expires and you will no longer have the legal right to purchase the property. Further, you forfeit any rent credits and the option fee paid to the Seller.
  • The Option Agreement will offer you the ability to extend the agreement for a set period of time. If this extension is offered, it typically requires a small fee and/or criteria you must meet.

Option Fee

With a Lease Option/“Rent to Own”, you will be paying what is called an option fee which is generally 3-5% of the negotiated purchase price.

This fee is generally credited towards the purchase price of the home.

Rent Credits

Rent credits are common with a Rent 2 Own home.

It is the portion of rent that’s credited to the purchase price each month that the rent is paid on time. Do not expect to be given a credit if you pay your rent late!

The monthly rent credit amount is another one of those negotiable points between the Rent 2 Own Buyer and the Seller.

Rent to Own Road Map

Using the Rent 2 Own approach is an extremely powerful strategy that anyone can use to buy a home, even with a poor credit score.

Yet many search for their dream home while being completely unprepared. They don’t have the critical road map necessary to safely navigate a successful “Rent 2 Own” home purchase.

Once you are serious about using the Rent 2 Own strategy, merely click on the Rent 2 Own link to unfold your Rent 2 Own Road Map to success.


  • Our experience with Twin Cities Rent 2 Own was fantastic. Not only did we end up with the house of our dreams in a location we love, we had great personal service from not just one member of the Rent 2 Own staff, but the entire team. We felt listened to, respected, and our needs and wants were given personal attention from Shaun.He was responsive, very knowledgeable and really fun to work with. When we needed input from others at Rent 2 Own, they were there on weekends, evenings and whenever we needed them.

    - Leah
  • I would like to thank Twin Cities Rent 2 Own for the outstanding job they did in placing the right buyers into one of my rental units. Shaun & Glenn were very helpful in walking me through the whole process of what to expect, timelines for marketing & executing a deal, as well as clearly laying out the numbers of why it is a better deal in this market to go with a rent to own sale versus a traditional sale. I was impressed at how quickly they had the property listed on their website, the MLS and had signs canvassing the neighborhood to market this property. Shaun took care of all the showing and stayed in constant communication with me through the whole process.

    - Jay L.

We are personally inviting you to join Twin Cities Rent 2 Own email outreach list. Future emails will include new property listings, as well as requests for certain types of properties we may be looking for to fit our Buyer’s needs. We will also be sending out a quarterly newsletter filling you in on all the latest trends in the Rent 2 Own market place.