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 haven’t – but bumping this thread to make it more visible to the rest of the Community!
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.