• Higher Monthly Costs Than Typical Rent: Rent payments are often higher than market rents as this is a mortgage that is taken out to purchase you at home at today’s prices.  Rent is usually based on the mortgage owed on a home purchased at a lower purchase price and years before now.
  • Non-Refundable Fees: The option fee or downpayment is typically non-refundable if you decide not to buy or can’t secure financing.
  • Loss of Rent Credits: If you don’t buy the home, you usually lose any accumulated rent credits.
  • Property Value Fluctuations: If the home’s value decreases, you might be stuck paying a higher, pre-agreed price.
  • Repair Responsibilities: You are responsible for maintenance and repairs during the rent-to-own term, which is not the case with standard rentals.
  • Financing Isn’t Guaranteed: You still need to qualify for a mortgage at the end of the lease term. If you can’t, you may lose your option fee and rent credits, and in a lease-purchase agreement, you could face legal issues.  It is important to note that this requires you to work to improve your situation so you can qualify for a mortgage.  Doing what you were doing before the rent-to-own (which is usually not proactively taking you towards a mortgage) will not work in a rent-to-own.  Use the support that is offered and always ask for help and guidance.
  • Potential for Scams: It’s crucial to work with reputable companies or individuals and have the agreement reviewed by a lawyer.
  • Renovation Restrictions: There may be limitations on any changes or renovations you can make to the property during the lease period.