Is rent-to-own ever a good option?

Like Joe said, it can be OK but be sure to do your research and be prepared.

Buyer beware!!... One of the biggest scams on craigslist are scrupulous people trying to rent a home that has been vacant for months.. They don't own the home, they just find a vacant home in a neighborhood and advertise it on craigslist for "Way Below Market".. And rent it out to several people, collect the funds, and you never see them again.. as far as rent to own opportunities (sometimes called lease to own, purchase option, etc.. ) they're basically all the same and the one who benefits the most is the seller... For most rent to own opportunities, you pay a large upfront deposit (non refundable), or you pay a higher than market rental amount, which gives you a monthly credit towards the purchase price in the future.. they most always have an performance date as well.. Say 2 or 3 years... before that period comes up, you have to purchase the property and payoff your landlord.. It benefits the seller because they collect a large upfront deposit.. if you default, you get evicted and he keeps the deposit... he collects a higher than market rental amount, but only give you a small portion back as a credit, again if you default, he evicts you.. and if you actually can qualify after the lease ends, he sells the home for a higher than market price... all benefiting him.. If the property is in a market where values are still declining (Detroit for example).. then the tables turn in favor of the buyer.. you do get to purchase a home without using bank financing and will most likely benefit both the buyer and seller... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

I am an active rent-to-own investor, as well as a licensed Oregon loan officer. Properly done, they are an excellent way to be a homeowner. Call me, Dave Metsker, at 503-620-2239 for more information.

They can be if you can't qualify for a traditional loan. My advice if you do one is the Document EVERYTHING and make your payments through a 3rd party source and/or an escrow company and NEVER make payments in cash.

Sometimes it is OK, sometimes it is too good to be true. The bottom line is you are always just a renter... period. Then, depending on how the individual owner handles it... Maybe you agree on a price today with first option to actually buy later. Maybe they credit you $50 of your rent towards a reduced sell price later. Maybe you pay a big down payment and you have to get a loan and buy it by a certain date. Just be sure you know what you are getting into before signing on the bottom line.

For the right person they are a way to lock in a purchase price and start gaining some down payment equity. You need to document them properly up front so you are not in a position for the landlord/seller to take advantage of you. If you are in a short term position that is not allowing you to qualify for traditional lending then they are great again done correctly. I am an Oregon lender that works with a few sellers doing these type of transaction we look at the potential renter/buyer and advice what we think the probability they will qualify for traditional financing and what the time frame needed would be.

Be very careful of scams on Craigslist! Rent to own can be good option in some cases, but like others have stated, make sure you documents everything, so that you do not get taken advantage of by the seller. You will want to come up with a legal agreement as well, outlining everything in detail.

As noted below - they can be a good option, IF you do your homework properly.Initially you would not absolutely need a lender; however, you should talk to a local, licensed mortgage officer -- to verify what you status is toward qualifying to buy a home - so you know you can actually "perform" when required. Additionally, they may be aware of down payment assistance programs in your area, which might make it possible to buy now - while rates are relatively low.