Hi there! I’m working on an article about rent-to-own homes. I’ve seens tons of ads for these properties on Zillow and Craigslist, and always wondered how they worked.
Something interesting I came across: Divvy, a growing rent-to-own corporation, says about 40% of its renters ended up buying the home. Home Partners of America claims a 45% renter-to-homeowner conversion rate, according to a July 2022 report from Moody Analyics.
So less than half of people who sign up for these homes actually end up buying them!
Has anyone here ever entered into a rent-to-own agreement for a home? If so, what was your experience like?
I work at a local housing authority, and it is not unusual for my participants to pursue this. I have never seen it work out. And most times it does not appear to be legitimate- there are a lot of scammers out there! People will ‘rent to own’ for a few years and find they are no where closer to owning than they were when they rented from us.
That said, I am very interested in the article. I would love to direct people towards another legitimate path to homeownership.
I’m a retired real estate broker and maybe only did 2 to 3 option to purchase contracts in my entire career, but never had one fall through. I think what you may be describing now is not the same as I’m speaking of. The option to purchase or lease to purchase was a binding contract between a potential buyer and the property owner. (check Key Terms in Option-to-Purchase Agreements | Nolo) Is that the same type of rent to own you are seeing everywhere on craigslist, etc? That sounds more like a 3rd party company signup rather than the contracts I’ve had experience with.
So my mom actually did a rent-to-own for a house when I was in middle school. I don’t remember much except that wr had to wait the entirety of thw week were supposed to move in because we had to clean out the entire house before moving in and I happened to have a broken ankle at the time.
She entered the agreement with the home owner who had been living there at the time and she would get so frustrated at trying to get the other woman to commit to either a specific term or a move out date so we could move in. Also, make certain to read the fine print to ensure they aren’t trying to scale the payments if you want fixed amd that you wait the required amount of time before making any changing to the property.
We had an unfinished attic/upstairs we had to wait until after the first year minimum before we could do anything about it which frustrated my mom when spring rolled around and she could map it until about halfway through the summer due to some wording that allowed us to get walls put in.
Hopefully that helped somewhat for your article. I know dufferent states and even cities will have different laws regarding home ownership and buying/leasing practices. Maybe you could ask local realtors and real estate agents to help with the information? This is just what I remember my mom going through more than 20 years ago when I didn’t really care how we had a place to live, but was excited at tne promise of my own bedroom (never did get actual doors on those bedrooms though)
