A really common question from people looking at renting to own a Boston house is “are you required to buy the house in a rent to own home contract at the end of the rental term?”
For example, if you found a great Boston rent to own home and agreed on an attractive rent to own agreement (lease option) with the seller that involved:
– $10k upfront
– $200k purchase price option at the end of the 24 month rental agreement
You have the opportunity to purchase the home for $200k within 24 months or less.
Are You Required To Buy The House In A Rent To Own Home Contract / Agreement?
If the 24 months expires and you’re not ready to purchase the home but you still want to live there, connect with the seller and see if they’re willing to offer you an extension on the rent to own contract. Often times, if you’ve been a great renter and show a genuine intent to buy the house, the seller will work with you.
If the 24 months comes up and you’re just not ready to buy and you don’t want to stay in the house, you can move out and not purchase the house, usually with no penalty.
What Happens To The Money You’ve Paid The House Owner Up To This Point?
If you choose not to buy the house, the time you spent in the home is treated just like a rental.
That there are two parts to the agreement.
- A Rental Agreement: You pay a monthly rent on the house for a specified term.
- The Option To Purchase: This is a separate agreement that gives you the option to purchase the house for an agreed upon price at a future date.
If you decide not to buy the home you’re simply deciding not to exercise your option to purchase the house. It gives you as the rental tenant / buyer great flexibility in the deal.