If you're considering buying a home but are not quite ready to make a commitment, you may want to consider looking for rent-to-own homes. It allows you to rent a property while gradually working toward qualifying for a mortgage to buy it later on.
But rent-to-own homes only make up a small percentage of the real estate market and are not as widely available as traditional rentals. Finding legitimate, affordable rent-to-own home listings near you can prove to be quite difficult if you don't know where to look.
How to find legitimate rent-to-own homes near me
Finding a rent-to-own home can be challenging, as the number of available listings varies quite a bit depending on your location and local market conditions.
We recommend starting your search by contacting a real estate agent to ensure your home fits your needs. Still, you’ve likely got a few options in help finding a rent-to-own home. Here are your top options.
Hire a real estate estate agent experienced with rent-to-own
Realtors have access to the multiple listing service (MLS) and can help connect you with landlords and rent-to-own companies to view homes in-person. Experienced, connected realtors may also have access to listings that are "coming soon," so you may be able to view potential options that are not advertised, giving you a leg up over other buyers.
Good agents will provide support as you search for and compare your options. They can walk you through each contract's terms and conditions, show you homes in person, and help you understand any potential risks with each home.
📜 Consult a pro
Rent-to-own agreements are complicated, so you might want to avoid the DIY approach — especially if you're not ready to negotiate with homeowners. You could end up overpaying or agreeing to unfavorable rental terms (or worse, getting scammed by a deceitful landlord or company). Before signing any rent-to-own agreement, have a trained professional look it over.
A realtor specializing in purchase agreements or a real estate attorney can provide valuable insight and guidance on the contract terms and conditions of the contract, and an attorney may help you negotiate changes or additions to the agreement to better protect your interests.
Contract items that an attorney might review include:
- The home's future purchase price, and how the landlord or company arrived at the price
- Monthly rent payments, which should be based on fair market rent for similar properties in the area
- Up-front costs, such as an option fee
- What happens if you can't make rent payments or decide not to buy the home
- Pet restrictions and costs: how many are allowed, breed restrictions, and potential fees
How to find a rent-to-own realtor
Finding the right realtor to help you search for a rent-to-own property can be difficult. But the process is much easier when using an agent matching service like Semya-Moya or Ideal Agent.
Work with a rent-to-own company
Many rent-to-own companies purchase properties and then lease them back to tenants, with the option to buy later. This can be a good option for people who want to live in a specific house but don't qualify for a mortgage right away.
What are some legitimate rent-to-own programs?
The biggest rent-to-own companies right now are Divvy Homes, Home Partners of America, and Dream America. Each offers different services and rent-to-own terms. For example, Divvy Homes uses three-year rental terms before the tenant can buy the home, while Home Partners of America uses five-year terms. Before agreeing to rent and buy a home, do some homework on each company to find the one that best fits your needs.
Here are a few key considerations when comparing rent-to-own companies.
Some rent-to-own companies only operate in certain regions, so make sure to check if the company serves your area before reaching out to them. You can usually find a company's list of available markets on its website in the frequently asked questions (FAQ) section.
🔎 Find rent-to-own homes in your city
Rent-to-own companies have varying, sometimes strict, requirements for qualifying. Factors such as your credit score and income are usually taken into consideration.
Rent-to-own companies often only allow you to choose a renovated or move-in-ready home and don't allow fixer-uppers. Additionally, your options may be limited to single-family homes and townhouses, and may not include condos, duplexes, or multi-family properties.
Many rent-to-own companies are newer and have not yet been thoroughly tested in the market, which can make it hard to compare them. A small number of negative reviews may not be a cause for concern, but it's worth paying attention to any recurring themes or issues.
The terms of rent-to-own agreements can vary widely between companies. This includes the length of the rental period, which can range from one year to several years, as well as the type of contract (lease option vs, lease–purchase agreements).
Search online and contact a homeowner directly
If you want to do some solo research before talking to a realtor, you can also search real estate listing websites for rent-to-own properties on your own. Websites like ZeroDown, HomeFinder, Hidden Listings, and Rent to Own Labs often advertise rent-to-own home listings.
Websites like Zillow and Redfin allow you to filter your search for rent-to-own homes, while Rent-to-Own Labs and Homefinder specialize in these listings. Simply enter your criteria and contact the homeowner or company directly for more details.
Are rent-to-own websites legitimate?
Generally, yes. Websites like Rent-to-Own Labs and Homefinder allow you to easily search for RTO homes and contact sellers. These are not to be confused with rent-to-own companies like Divvy Homes, which works WITH you to rent and buy a home, as opposed to connecting you with a seller.
Tips for finding legit rent-to-own properties
💻 Research the seller or rent-to-own company
Before committing to a rent-to-own home, aim to learn as much as you can about the owner or company. Here are a few steps you can take to make a more informed decision:
- Verify that the seller is the actual owner of the property. View the home's ownership information from its tax records on a local county or city website.
- Google online reviews. Check out the rent-to-own company or property manager reviews to get a better idea of their customer service. Websites like TrustPilot and the Better Business Bureau (BBB) can be helpful resources for finding and comparing customer reviews.
- Search for customer complaints. Similarly, it's smart to see how many BBB complaints a company has and if the complaints have been resolved.
In addition, find out why the seller is offering the home as a rent-to-own instead of selling it. For example, the homeowner might want to rent the home before selling it, or they may be having difficulty selling and think this will help. Knowing their reasons can help you during negotiations.
🔎 Watch out for overpriced (or underpriced) properties
Be aware of the potential for rent-to-own scams and be on the lookout for warning signs. Here are a few questions to ask yourself to help evaluate a listing's legitimacy:
- Is the home’s listed price realistic, and is there a reason it’s significantly lower or higher than comparable properties in your area?
- Does the cost breakdown for renting and eventually purchasing the home include high up-front fees? Are these fees justified and explained clearly?
- What’s the home’s condition? Will it require a lot of maintenance and repairs after you move in, and will you be responsible for covering those costs?
The homeowner or rent-to-own company should be able to answer these questions clearly and promptly.
|🚫 If you suspect that the rent-to-own arrangement is a scam, file a report with the police or the Federal Trade Commission.|
Why trust us
The Semya-Moya team spent dozens of hours researching the ins and outs of rent-to-own programs to create this comprehensive guide. We thoroughly examined agreements and consulted with industry experts to bring you the most accurate and reliable information.
It's our opinion that the best way to find a rent-to-own home is by working with an experienced real estate agent. They have the knowledge and resources to help you find the right home for you quickly and efficiently. The benefits of working with a realtor far outweigh any potential downsides (which are minimal).
Rent-to-own homes can be a good housing option for people who want to buy a home, but are unable to qualify for a mortgage. However, it's important to be aware that not all rent-to-own programs are legitimate or cost-effective. Consult with a local realtor or a real estate attorney for more specific, localized guidance.
- Marjorie Scholtz, the CEO of Verbhouse, a rent-to-own company that aims to provide affordable home financing options for low and middle-income workers in high-cost housing markets. Marjorie is also a licensed real estate professional and previously worked as a co-founder and CEO of Stangl Advisors, helping people navigate loan modifications, short sales, and foreclosure alternatives.
- Michelle Boyd, a housing policy expert who works with Terner Center, a nonprofit organization dedicated to making housing more affordable and fair for consumers. Boyd also works with Terner Labs, a nonprofit affiliate that leverages technology to improve housing affordability and sustainability.
About the authors
Steve Nicastro is a real estate professional with extensive experience in South Carolina, where he has personally helped people find and evaluate rent-to-own homes.
He believes that working with a seasoned buyer's agent can be extremely beneficial when searching for rent-to-own properties. An experienced agent will use their access to the MLS, industry connections, and local knowledge of rent-to-own companies to help clients find the best housing options in their area. They can also assist with understanding and negotiating rent-to-own agreements and ensure that client's interests are protected during the process.
Brendan Rigney is a researcher and content writer at Semya-Moya, where he writes about home buying, selling, and investing. He has a background in urban affairs and housing and also works with local governments, nonprofits, and community organizations to study and address policy issues.
Prior to joining Clever, Brendan worked as a freelance reporter, writer, and researcher for various media outlets, nonprofits, and businesses. He received his B.A. from La Salle University and his Master of Public Administration degree from DePaul University, with a focus on metropolitan affairs and policy.