Wednesday, March 12, 2008

What is Rent To Own?

Rent to own (RTO) is a means of acquiring ownership over time without taking on debt. RTO companies rent items, most typically furniture, appliances and electronics, with the condition that the item will be owned by the renter if the term of rent is completed. Since rent to own stores do not require a credit check or down payment, they are popular with sub-prime-credit consumers; those with damaged or no credit history. RTO is also popular with corporate travelers on temporary assignment as there is no long term commitment involved; An item can be rented and returned at any time without penalty.

In this site, RTO is limited to Real Estate Rent to Own.

Most RTO transactions are monthly; the tenant agrees to pay a monthly amount for leasing property. Usually at 20-25% downpayment is also required by the leasor. RTO agreements or contracts are generally on a 5, 10, 15 or 20 year term. If the tenant rents the property for the full term, ownership is acquired. Tenant may also pay off the balance before term end to fully acquire property.

1 comment:

Unknown said...

Rent to own.org and rent to own home listings.com are just advertisement scams so dont get stuck in it.