Rent to own gives you a home to rent now and a chance to buy it later. It can help if you can afford the home but are not ready for a mortgage today.
It can also be a bad deal when the papers are not clear. You should know the price, the deadline, who pays for repairs, and what happens to your money before you sign.
The two papers
A rent-to-own deal often has two parts:
- A lease. This is the rental part. It says what you pay each month and the rules for living in the home.
- An option to purchase. This gives you the right to buy the home before a deadline. An option gives you a choice. It does not force you to buy.
Words you need to know
An option fee is money you pay for the right to buy the home. Each seller can treat this money in a different way. Ask whether it counts toward the price when you buy and what happens if you do not buy.
A rent credit is part of your monthly rent that may count toward buying the home. Not every offer has one. Ask how much it is and where the agreement shows it.
Cash for Keys is the name Strong Blocks uses for the amount you pay before moving in. It has three parts: your security deposit, your first month's rent, and your option fee. The option fee is the part that counts toward buying the home.
How Strong Blocks does it
Our program starts with a 21-month lease option. A 6-month extension is built into the same agreement, so the first agreement can cover 27 months.
Your rent is set for all 27 months. Your agreement also shows two purchase prices before you sign. One price applies during the first 21 months. A higher price applies if you use the 6-month extension.
After 27 months, you can sign a 12-month renewal if you still want to buy. A renewal can change your rent or purchase price. The option fees and rent credits you already earned still count.
Cash for Keys starts at $5,000. A typical amount is $5,000 to $12,000, but every home is different. You see the exact amount before you decide whether to move forward.
You can pay it all before move-in. You can also use a payment plan. With a payment plan, you pay a smaller option fee before move-in and then a $200 monthly option fee on top of rent until you buy. Either way, 100% of your option fees count toward the purchase price when you buy.
Most homes also have a rent credit of $50 to $200 each month. The exact amount is in your agreement. It counts toward the purchase when you buy.
Who pays for the home before you buy?
Strong Blocks owns the home while you rent it. We pay the property taxes, insurance, maintenance, and repairs. You pay for damage you cause. You also handle snow, grass, and general cleanup. The resident page shows the full split.
We inspect and prepare the home before you move in. You see the rent, both purchase prices, Cash for Keys, option fees, and rent credits in writing before you sign.
How buying happens
You still need a mortgage when you are ready to buy. Strong Blocks cannot promise that a lender will approve you. We help you make a buying plan and connect you with independent housing counselors and lenders. Strong Blocks does not charge extra for that help.
If you decide at 21 months that the home or program is not right for you, you can move out. You lose the option fee if you leave without buying.
Not every deal uses the same words
A lease option gives you the right to buy but does not force you to buy. This is what Strong Blocks uses.
A lease purchase may require you to buy by the deadline. A land contract is different from both. The seller acts as the lender while you make payments. Do not assume these papers give you the same rights. Get legal help if you do not understand what you are being asked to sign.
Before you sign
Read every page. Ask what happens if you cannot buy by the deadline. Ask who pays for repairs, taxes, and insurance. Ask which payments count toward the price. Take the papers to someone you trust.
You have the right to understand the deal before you sign it.
See what Strong Blocks looks at before you apply.
Want to know if this program could work for you?