Experience the Difference
Randy Schulenburg

Rent to Own Programs – The Pro’s and Con’s

I was recently asked the following question:

“What type of rent to own programs are there and how do you tell the legit ones from scams? Is there still a down payment with rent to own? How do you even get started in a rent to own.”

Here was my answer:

Rent to own programs are not right for everyone.  Most of the time it is just better to rent than to complicate it with adding the ‘own’ part to the equation.  Rather than set it up as a ‘rent with option’ at the beginning, you could write into the lease that you have the ‘first right of refusal‘ to purchase the property if the owner decides to sell in the future while you are renting.

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A typical rent to own scenario would require you to pay more per month than the market rent for the property.  The additional rent would go towards the purchase of the property at the pre-determined time.For example, market rent is $1,500.00.  You would pay $1,750.00.  The additional $250.00 per month would be credited to you at the time that you close on the property.  That would be $2,500.00 per year.  If the ‘option to buy’ was set up 2 years from now, that would mean that you would have $250/mo for 24 months.  That $5,000.00 would be your down payment when you purchase the property


  • You pre-determine the price you will pay for the house
  • You have set aside the money for the down payment through paying the additional ‘above market’ rent
  • The Lender you use to buy the house will use the credit from the Seller if it is set up correctly in the lease and you can document that the rent you paid was above market
  • The property may be worth more than what you agreed to pay when you wrote up the contract
  • You have a greater sense of ‘ownership’ and don’t feel like you have to move when your lease us up
  • If you decide you don’t want to buy the house, you don’t have to!  It’s your ‘Option’ to Buy not your ‘Obligation’ to Buy.


  • You pay more per month than market rent
  • The ‘Seller’ is saving your money for you
  • If you don’t end up buying the property the Seller may keep the extra rent you paid based on how the contract was written
  • The property may be worth less than what you agreed to pay when you wrote up the contract

To make sure that you don’t get scammed, you should always hire a real estate attorney to review anything you sign.  The attorney will be able to assure you that what you are signing is a legitimate contract.

About the Author: Randy Schulenburg is the Broker/Owner of Schulenburg Realty, Inc. and has been in the real estate business since 1993. He is an Local Area Expert who specializes in properties in the Northwest Suburbs of Chicago. Contact Randy at 224-805-2616 or at Randy@Schulenburg.com

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