top of page

Rent-To-Own/Lease Option - A Win/Win

Updated: Sep 28, 2023

A rent-to-own or lease/option is a very misunderstood strategy of real estate investment that can be a solution for some people who want to buy a house but are unable to for a variety of reasons. Let’s break it down quickly.

Who Is This Strategy Good For?

The typical client in a rent-to-own arrangement is someone who has a high household income but is unable to qualify for a mortgage currently for a variety of reasons. These reasons can include, but are not limited to, a recent divorce, bad credit, no credit, insufficient length of employment, lack of a down payment, new immigrant, etc.

Tenant-First Strategy

The goal is to have the tenant-buyer qualify for a mortgage at the end of the term. We do some initial screening of interested parties through a form on our website that gives us some background information. The next step is to schedule a phone call where we go a little more in-depth on the needs of the client. Some of the questions include the location that they would like to buy, any specific needs of the buyer (number of bedrooms, garage, etc.), and the price point that they are interested in. After this initial consultation, we send out an application form for the buyer to fill out. Once this is complete, our credit specialist looks over the application and creates a customized report for the tenant/buyer that gives them a plan to help them qualify for a mortgage at the end of the term. With this information, we can begin a search for a house that fits the needs of the client.

How Are The Payments Structured?

Prior to signing any paperwork, we agree to a sale price for the end of the term. Typically, the sale price is lower than market appreciation, generally around 5% per year compounded annually. We structure all our payments around this final price. The tenant/buyer puts down an initial down payment, usually a minimum of around $10,000 on the purchase of the home. We then purchase the home, and the tenant/buyer rents the house from us for a set term. Over the length of the term, the tenant/buyer has 2 monthly payments. The first payment is a typical rent payment, and the second payment is an option payment. Together with the initial down payment, the monthly option payments are credited 100% toward the purchase price of the house at the end of the term. Term length is generally 1-3 years. Over this time, the tenant is given a chance to repair their credit, build good employment, and a large down payment. At the end of the term, the tenant/buyer gives notice that they want to purchase the home for the price that was set out at the beginning of the contract, they qualify for a mortgage with an A lender, and they use their option payments and initial down payment to purchase the home. If the client cannot qualify at the end of the term for whatever reason, we are willing to work with the client to extend the term and renegotiate the terms.

Final Thoughts

A rent-to-own arrangement must be a win/win for all parties. Each arrangement is slightly different depending on the needs of the client. Remember, we are here to make this a successful transaction, not to take advantage of people in a vulnerable situation.

Pros for the Tenant/Buyer

  • The ability to get into a home before they can qualify on their own

  • Have regular contact with a credit specialist throughout the term to keep them on the right track

  • The option, but not the obligation, to purchase the home for a pre-set price that is often below market value

  • Payments that are structured for their budget

  • Professional market analysis and support only a phone call away

Pros For The Investor

  • Working with qualified, top-tier tenants that take care of the property like it is their own (because it soon will be!)

  • Have a defined entry and exit plan for their investment with set terms

  • Low-maintenance properties in good neighborhoods

If you are interested in applying for the rent-to-own program, we would love to hear from you.

Have questions about your portfolio or want an outside opinion? Please select the button provided below, and I will schedule a free half-hour call with you to go over your situation! Talking to the right people can really save you money. I really believe that this is the time to expand your network and learn from those around you. I'll be in touch!

I'd love to hear your thoughts on this! Have a great week while working past those obstacles on your climb to success. Let's Grow Together!

Jonathan Beam

Real Estate Investor and Entrepreneur

Jonathan Beam is a real estate investor in the Niagara region who is passionate about helping you achieve financial freedom through real estate. He works with new and experienced investors to formulate a plan that fits your specific situation and provides market guidance and consultation on the best places and strategies to pursue within the Niagara Region. Book a free, half hour no obligation consultation to see how he can help you to achieve your goals. His travels are available at

For a free market analysis on 2 markets within the Niagara region that we are currently investing in, please visit the home page and fill in the contact form at the bottom for your free report!

Recent Posts

See All


bottom of page