The dream of owning one’s own home is something that everyone dreams of at some point in their life. There are a variety of things that can hold you back from doing so, but a rent to own agreement isn’t one of them. In fact, it is a great way for a renter to become a home owner.
A rent to own lease agreement is used as a specialized real estate agreement in which a renter, who may have had some difficulty acquiring a loan, can enter into a purchase agreement to buy the house. Typically, when the buyer signs the rent to own agreement, they agree to rent the property for a period of time and then buying it when that time expires.
Rent to own home agreements, along with many other forms, such as a month-to-month rental agreements and fixed-term lease agreements, are available in our Landlord Forms package.
Our forms and rent to own templates are very easy to use and cover everything you will need when creating a lease agreeement that you will sign with your tenants/perspective buyers.
Here are a few questions that we have received in regards to rent to own agreements.
What is a Rent to Own Lease Agreement?
A Rent to Own Lease Agreement is an agreement that allows the potential buyer of the property to enter into a lease agreement with the seller. This agreement is entered into with the intention of buying the property at the end of the lease.
A rent to own agreement form includes all of the same things that you would see in a standard lease agreement. Things like monthly payments, due dates, late fees, repair arrangements and all of that; but it will also include details about the potential of buying this home at the end of the lease. This would include an option fee, the length of the agreement, terms for terminating the agreement, and how much of the rent will go towards the sale of the property or the closing costs.
What Types of Rent to Own Agreement are there?
There are two types of rent to own agreements:
Lease Agreement with Purchase Agreement: This is when both parties have agreed upon a purchase price for the home and a future closing date. The renter will then pay “rent” for a preset amount of time with at least a portion of that money going to the purchase of the house or the closing costs.
Lease Agreement with Option to Purchase: This type of agreement is more like a standard rental agreement with the option to purchase. You can put in an “option fee” for the right to purchase the home at a later date. If the tenant chooses to exercise the option, the seller is required to sell the property to the tenant. If the tenant opts out, they can forfeit their option fee.
Do you have a downloadable Rent to Own agreement?
Yes. We have a downloadable rent to own template available in multiple different computer formats. This means that our form will work on everything from a Windows computer to an iPad to an Android phone.
Our forms are available in multiple formats as well. The most popular being our PDF rent to own agreement. You can open this one in Adobe Acrobat or your preferred PDF viewer. You can also make the rent to own agreement in .DOC for Microsoft Word or .RTF (Right Text Format) that will work in any Word Processing Software. This last one is great for those who might not have Microsoft Word as it will work in Google Drive, OpenOffice or whatever your preferred software is.
We can even take you one step further than that and have you print the landlord form straight from our website, in HTML format. All you need is a web browser and you can print right from there.
After you purchase our Landlord Forms package, you will be able to save and print any and all of these formats.
Who handles repairs and maintenance in a rent to own home agreement?
While a typical tenant/landlord relationship would see the repairs falling solely on the responsibility of the landlord, it can differ in a rent to own agreement. When filling out our rent to own agreement template, you will have the option to clearly outline who is responsible for such repairs. It is typical for larger things to be the responsibility of the landlord while smaller repairs and upkeep to be on the shoulders of the tenants.
When should I use a rent to own agreement?
The rent to own agreement template should be filled out if the following conditions are met:
- The renter wants to eventually buy the property that is currently for rent or for sale by the landlord.
- The property owner/landlord is wanting to enter into a rent to own home agreement with their tenants in order to help them make the purchase of the home.
As with any type of rental or purchase agreement, there are two different sides that need to agree in order to enter into a contract. Both parties have their own advantages and disadvantages in entering into this agreement, but it can be rewarding for both parties in the end.
Do You Have a Sample Rent to Own Agreement Form for Download?
You can see a sample of the rent to own agreement below and what it looks like. Our users input data prior to creating the rent to own lease agreement like this:
Our goal is to make it as simple as possible for our users and it is a rather simple procedure to create a rent to own least agreement PDF. Or other format.
Do you offer a Free Rent to Own Lease Agreement?
No. Our rent to own template is not free, but once you have signed up you will be able to create and download as many agreement forms as you would like. You can create multiple forms or even print our wide selection of other landlord forms if you get our full landlord package.
How to Write a Rent To Own Agreement:
Writing a rent to own agreement is not something that you can do on your own. Our system is set up however to make it as easy as possible, and hold your hand throughout the entire process.
We ask you simple questions that allow you to customize a completed rent to own agreement.
First we ask you for the address of the property and the type of premises. We also offer a section if you need to provide additional details on the property you are renting to own.
Then we have specific questions about the property. For example, is there a minimum age for tenants and if smoking is allowed. Are pets allowed on the property and are you going to provide details in regard to parking? Also the sublet section – can the tenant sublet the premises? And also how much notice must be given prior to the landlord entering the premises.
Then we get into the personal details – asking you the landlords name and address and the tenants name and address. Our form is also set up for both multiple landlords and multiple tenants.
Then the terms of the agreement. When it begins, when it ends, if there are termination notice details you would like to add, and whether the Tenant/Buyer have had independent legal advice for executing this agreement.
Then we have a section in regard to payments and the purchasing options. What is the price and what is the option to purchase cost? Also when will rent be paid? And what is the amount of the rent? Also how much amount of the rent each month is then applied to the purchase price?
There’s also sections on how the payments can be made, and when they are to be made.
Finally we offer up a section where you can outline certain responsibilities in regard to the property. What duties or maintenance, if any, that the tenant is to perform on the property. Who is to pay for utilities? Those details must be outlined as well. Are you including any appliances or furnishings with the property? We’ve got a section specific to that too. And finally is there any amenities available for the tenant?
Our system then takes all of your answers and fills in a rent to own blank template that we have. This template is adjusted based on your input. FOr example if you say no there is no appliances or furnishings then there won’t be anything within the completed rent to own in regard to that.
Either way you will have a complete and customized rent to own to your exact needs and requirements.
Rent To Own Agreement Q&A:
What is a Rent To Own Agreement?
A Rent To Own Agreement is an agreement made between a tenant and landlord with the plan for the tenant to eventually own the property.
Generally within the rent to own agreement, there will be a section for payment and purchasing of the property. It will state the purchase price, as well as an option to purchase cost.
When it lists the rent amount, there will also be an amount of rent that is actually applied to the purchase price. So you may pay $1000 per month in rent, however $200 of the rent goes towards the purchase price of the home.
How to make a rent to own agreement?
Simply by purchasing our landlord forms package you will be able to create unlimited rent to own agreements. How it works is our system will prompt you with some questions – almost like a survey – to customize the rent to own home agreement to your satisfaction.
How to structure a rent to own agreement?
Our system structures a rent to own agreement using the following headings and sections:
- Property Details
- Property Guidelines and Restrictions
- Length of Agreement
- Purchase Price
- Landlord and Tenant Responsibilities
- House Alterations
- Quiet Enjoyment
- Notice to Exercise Option
- Option Consideration
- Legal Fees
- Binding Effect
- Independent Legal Advice
- Entry by Landlord
- Entire Agreement
- Governing Law
- Headings and Interpretation
This can also vary depending on what you choose when creating the rent to own. For example there may need to be a section on a lead based paint disclosure.