question about renting vs. rent to own

[sofarindebt]

Which is better? Anything I need to know about Rent to Own, or Lease Purchase, or Contract for Deed? I am thinking they are all the same.

We will have to be out of our house this summer so I am thinking of all our options now.

[HHM]

The main difference is that in a Rent to Own (lease purchase) situation, part of your monthly rent payment is applied toward a possible down payment on the house you are renting (it's usually a small amount, $100 per month, so it really doesn't amount to much in the long run). Whereas, if you are simply renting, the monthly rent is simply monthly rent.

However, not all rent to own schemes are the same, and some are just outright scams. The main thing you want to watch out for in Rent to Own situations is what happens to the down payment portion of your monthly payment if you decide not to buy, or if you cannot qualify at the time the purchase is going to be made. Also, how is the purchase price of the home going to be determined.

For the renter, there is usually very little benefit to the rent to own, unless you are in a rapidly appreciating real estate market and you lock in the purchase price at the time you start renting.