How Does Rent to Own Work in NYC?

What Does Rent to Own Mean?

Rent to own is an arrangement where a tenant rents a property with either the option or the obligation to buy the property at the end of the lease term.

Buying a Condo vs Renting an Apartment (2020) | Hauseit®

Lease Option vs Lease Purchase Contracts

There are two types of rent to own transactions, one where the tenant has the option to buy the property at the end of the lease term, and another where the tenant has the obligation to buy the property at the end of the lease term. The former is known as a lease option and the latter is called a lease purchase.

Lease Option Contract

A lease option contract gives the tenant the choice of whether to buy the property or not at the end of the lease term, typically at the current market value of the home at the time of lease signing.
The amount of the monthly rent charged will vary, but will typically be a premium over the market rate. The owner may also try to charge an option premium for the right to purchase at the end of the lease term.
Depending on negotiations and what banks will allow, the rent premium (i.e. the amount of the rent above the market rental rate for the apartment) and the lease option fee can go towards closing costs or the down payment if the tenant decides to buy.

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Lease Purchase Contract

A lease purchase contract obligates the tenant to purchase the property at the end of the lease term, and will be quite similar in length and complexity as a regular purchase and sale contract in New York.

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Lease Purchase Contract

A lease purchase contract obligates the tenant to purchase the property at the end of the lease term, and will be quite similar in length and complexity as a regular purchase and sale contract in New York.

When Does Rent to Buy Make Sense to Do?

When rent to own makes sense for buyers

Buying vs Renting in NYC — Pros and Cons (2020) | Should You Rent or Buy in NYC?

Additional Costs of Rent to Own Homes

Closing costs for purchases are significant

What Are the Costs of Buying an Apartment in NYC? (2020) | Hauseit® New York City

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Save money when buying and selling real estate in NY and FL with Hauseit. Available in NYC, Long Island, the Hudson Valley and South Florida. www.hauseit.com