Rent-to-Own Contracts (a.k.a. Lease to Own Contract)

So you’ve decided to rent-to-own a home, or maybe you’re a landlord who wants to lease your property to a tenant.  The first step is drafting up a Rent-to-Own Agreement (also known as a “Lease with Option to Purchase “) that protects both the home owner and the tenant.

There are many sample rent-to-own agreements and templates online that you can customize and use.  Before using a template however, you should review laws in your state and common items included in a contract to ensure you covering all bases prior to signing a contract. 

Note that we here at HousingList are not Attorneys, and you should consult with an attorney prior to signing any lease-to-own contract or drafting a contract for your home.

What’s the difference between a rent-to-own agreement and a normal lease contract?

The contract for a rent-to-own agreement is very similar to the standard rental agreement you might find when renting a home or an apartment.   Additional clauses that include the option to purchase are included in this type of contract.   This allows the contract to be customized to someone looking to own a property after a pre-agreed upon time of renting the unit.

Option to Purchase

The option to purchase is what makes the rent-to-own agreement unique.  This information needs to be carefully detailed out in the contract.  When the tenant decides to purchase the home, a portion of historical rent payments will go toward the total cost, or down payment, of the home.

Option to Exit:

The lease also needs to include a clause detailing what happens if the tenant decides not to purchase the property.  This information is very important to both the home-owner and potential tenant, and needs to be reviewed carefully.

Important Rent-to-Own Contract Clauses:

The contract needs to include the following information in order to protect both the buyer and the seller:

  • Option Contract:  Covers how long the renter will have until they must purchase the home.   This can be negotiated between the buyer and seller.
  • Rent applied toward purchase:  The contract should have information that clearly details how much of the rent will be applied to the purchase price of the home.
  • Total Cost of Property:  The contract should detail the total cost of the property, and the home’s current market-value.  You want to note whether or not you will be purchasing the home based on its current market value, or another pre-determined price.   The tenant should be sure to inspect the house and order an appraisal.   This should be done prior to signing the contract as a thorough inspection could uncover potential issues that affect the value of the home now and in the future.   The contract should cover who is responsible for obtaining an appraisal and inspection.
  • Repairs and Maintenance:  The contract should cover who will be responsible for repairs and maintenance of the home.  In a traditional lease, the landlord is typically responsible for this.  This may change during a rent-to-own and should be negotiated between the buyer and the seller.

You can find contract templates and examples online.  We found the following resources you may want to check out:

Customizable and printable rent-to-own contract:

Create your own Rent-to-Own Agreement for your state:


Read more about rent-to-own contracts in our library.