In todays economy rent to own is an appropriate action for many buyers. Sellers are having touble selling their home and are open to other options. If the market was great then you sellers would simply be able to sell their homes to buyers who could qualify. But now they have to be more creative.

There are more buyers looking for rent to own because of their own issues. They may have damaged credit due to their home being foreclosed or they are caught in the credit crunch and aren't able to secure a mortgage. But they still need a place to live.

Rent to own allows both parties to structure a win-win situation. The buyer leases the home for a predetermined amount of time then purchases the home with some seller participation in the financing. They are using a portion of the rent or it's built into the price to do down payment assistance, lower the price or contribute towards closing costs.

Rent to own and lease option have the same goals but take a different approach to home ownership. 

Rent to own: A property is found, a lease is signed that spells out details of the lease period. What repairs and expenses the buyer is responsible for. In some rent to own the owner is essesntially making you the owner but without granting you title. This means you are responsible for all expenses such as insurance, real estate taxes and maintenance. You are just waiting till you can qualify for the purchase. You are not only leasing it but have the goal of purchasing it so you will sign a purchase contract at the same time you sign a lease. The purchase contract spells out the terms of the purchase such as price, timing and seller contributions. 

Lease option: A lease is signed for the property but an option agreement is also signed for the purchase of the home. This gives the buyer the "option" or right to purchase the property at predefined terms. One common feature of lease options is requiring buyers to make option payments on a defined schedule. This is like making deposits towards your downpayment over time and these payments will count towards your purchase.

To learn more about these options and the pros and cons of rent to own click here