Rent to own is a real estate term relating to a real estate agreement which is comprised of a rental lease and a purchase agreement where the tenant has the option to purchase the property at a fixed price at a specified point of time in the future. It is also known as lease to purchase option, lease option, owner financing or lease-to-own.
The lease resembles that of a typical rental lease where the owner, the lessor, allows the other party, the lessee, to occupy the property in return for a monthly payment. The option to purchase the property usually states the price at which the property is to be bought and the date at which the tenant is able to exercise the option.
