How to Lease a House With the Option to Buy

You may be able to buy a house with a lease-to-own option.

You may be able to buy a house with a lease-to-own option.

If you cannot qualify for a mortgage, you may still be able to realize your dream of home ownership. Leasing a house with the option to buy may be the answer that you are looking for. Sometimes called a "rent to own" or "lease to own" agreement, a lease with the option to buy allows you to rent your house for a predetermined amount of time, with the guarantee that you will be able to purchase the home at the end of the rental period. The Mortgage Professor offers some caveats against potential pitfalls, but with diligence, you can successfully lease a house and buy it within a few years.

Find a good real estate attorney. According to Realty Times, entering into a lease-to-own contract without professional assistance can lead to all sorts of mayhem, from the seller not fulfilling his obligations as a landlord, to you losing a big chunk of money. Sit down with someone well-versed with the ins and outs of the rent-to-own market, before deciding that this is the route you would like to take.

Look for a seller. Your local real estate agents may know someone who is looking to rent out a house with the option to sell later. Check the classified ads as well; some people who lease-to-sell their homes do so without the help of a broker, and may place their own ads in the newspaper. Another option, says Steve McLinden on, is to ask the owner of a home offered for rent if she would consider a lease-to-own option.

Talk to a mortgage lender about the details of eventually financing the house. Steve McLinden points out that if you can't qualify for a mortgage now, you very well might not qualify in two to five years, or whenever you are obligated to actually buy the home. Take a long, honest look at your financial situation to decide whether you will be able to follow through on your contract.

Sign the contract. If you feel good about the information provided by your attorney and banking lender, then carefully read through the contract for the lease-to-own arrangement, and sign on the dotted line.

Prepare for the future. Keep your credit score in good condition by paying your bills on time, so that you will qualify for a mortgage when you need one. Put away whatever amount you need to, in order to ensure that you have the required down payment available by the time you are ready to finance your home.


  • Keep a close eye on real estate trends in the months before agreeing on a price for your lease-to-own house, recommends Realty Times. If the house declines in value, you will still be responsible for the price that you agreed to pay for the house, and you may need a higher down payment than you had originally anticipated.


  • Remember that if you cannot purchase the house at the end of the lease period, you will not only be in breach of contract, but will lose any extra money that you paid toward your down payment, warns The Mortgage Professor. Proceed with caution.

Video of the Day

Brought to you by Sapling
Brought to you by Sapling

About the Author

Michelle Kulas worked in the health-care field for 10 years, serving as a certified nurses' assistant, dental assistant and dental insurance billing coordinator. Her areas of expertise include health and dental topics, parenting, nutrition, homeschooling and travel.

Photo Credits

  • Jupiterimages/Comstock/Getty Images