Rent-to-Own, renting a home, usually single family, with the option to purchase it at a later date appears to be making a comeback. This was a popular option, especially for the credit challenged, in the 1990s until the subprime boom replaced it with the no money down trend. And now it’s returning as lenders continue to make it challenging for many to obtain a mortgage loan. For the consumer (home buyer), rent-to-own allows him/her the time needed to repair and build their credit, while saving for the down payment. For investors this is a win-win situation, charging premium rent, and should the tenants decide not to purchase the property, investors are still able to continue collecting rent. Of course, this is not for everyone, but it is worthy of further consideration.

Source: “Rent-to-Own Homes Make a Comeback” Wall Street Journal (July 28, 2015).