What Is Lease Purchase House?

A lease purchase agreement in real estate is a rent-to-own contract between a tenant and a landlord for the former to purchase the property at a later point in time. The renter pays the seller an option fee at an agreed-upon purchase price, giving them exclusive rights to buy the property.

Is Lease Purchase a good idea?

A lease-option-to-buy arrangement can be a solution for some potential homebuyers, but it's not right for everyone. If you're not certain that you're going to be able to purchase the rental home at the end of the lease period, you might be better served with a standard rental agreement.

How does a lease purchase on a home work?

The Basic Structure of a Lease Purchase

In a lease purchase contract, the buyer and seller agree to a lease period followed by sale of the property when the lease ends. ... A portion of the rent is used for a down payment later on, but the renter is responsible for securing financing for the purchase once the lease ends.