Pros and Cons of a Rent Lease Option

A rent lease option is a leasing arrangement in which part of the rent gets deducted and applied towards the purchase of the home or condominium the landlord is renting out. It provides a path to home ownership for renters who may not be able to afford to buy a house any other way. This arrangement has become especially popular in the wake of the 2008 real estate crisis. While the rent lease option offers numerous benefits to renters and landlords alike, it also comes with some noteworthy downsides.

Benefits of the Rent Lease Option

For a homeowner, the biggest upside is that a rent lease option allows her to earn some steady extra income and secures her a potential buyer. Furthermore, the rent lease option usually allows the renter and the homeowner to negotiate the terms of the sale beforehand, which gives them the security of knowing that when the renter buys the home, it will go off without any complications or haggling over price. For a renter, the rent lease option ensures that he has a roof over his head and allows him to work towards purchasing a house without worrying too much about saving money.

Downsides of the Rent lease Option

That said, it is important to remember that the rent lease option does not obligate the renter actually to purchase a house. The renter can always walk away, and the homeowner be left with nothing save rental payments to show for it. Furthermore, rental spaces with rent lease options tend to be more expensive than similar rental spaces with ordinary rental arrangements, which may discourage potential renters.

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