How to Find a Rent-to-Own Home Without Getting Scammed!

Categorized as Rent To Own Homes

Rent to own is an excellent choice for someone who wants to own a home but doesn’t have credit that is eligible for a mortgage.

However, sometimes when you search for a rent-to-own home, you run the risk of getting scammed or tricked into a bad deal. Typically, if the deal seems “too good to be true,” or it is surprisingly cheap, take it as a sign and walk away.

Lucky for you, there are plenty of ways to protect yourself from getting the short end of the stick, and we will show you how.

Can I Find a Rent-to-Own Home Under $500?

The short answer is yes; you could find a rent-to-own home for under $500 a month. Is it safe? Probably not.

As I said earlier, if the deal is too good to be true, it probably is.

It is highly unlikely that a seller would allow a rent so cheap. But you get what you pay for. Unless it is a subsidized apartment, the cheaper the rent, the more worn down and distressed the apartment is in a typical renting situation. So why would a rent-to-own situation be different?

Additionally, if we look at Rent-to-Own programs such as Divvy, Dream America, and Home Partners, they charge higher than market rent to put money aside for your down payment down the line. It would be impossible for the seller to rent the house for $500 without losing money.

So why would a seller agree to such a cheap price? Remember, this is a two-way transaction. The truth is that it is highly likely that there are hidden fees or terms that will cost you more money in the end. Here are some examples:

  • No room for contingency. If you miss a payment, you lose your entire contract, and the seller keeps your down payment and rent money.
  • You’re responsible for maintenance and repairs. The seller is simply collecting money, but you’re responsible for making the house livable – which is essential to pass an inspection later.
  • Hidden Fees. You could be held responsible for paying property taxes or other debts tied to the house.

How Do I Find a Legit Rent-to-Own Home?

I believe the best chance to find a legitimate rent-to-own is by going through a program mentioned above. You could also find a home outside of a program, here’s how:

  • Contact a seller that hasn’t been successful in selling their home.
  • Find a renter that initially planned to sell.
  • Reach out to your friends or neighbors looking to sell their homes.

Be careful of who you trust, and never sign a contract that you don’t understand or that a Real Estate Attorney hasn’t checked first.

What Are My Rights as a Renter?

Also, you should be aware of your renter’s rights to protect yourself better.

Whether you are renting in a traditional matter or using a rent-to-buy contract, there are still laws in place that landlords must adhere to. It is in your best interest to hire an experienced Real Estate Agent or Attorney to minimize the danger of signing a contract that isn’t aligned with your goal.

Check out these examples of how Sellers can take advantage of Renters that are unaware of their rights:

Late Rent Payments. In most Rent-to-Own contracts, the seller can cancel the contract if your rent is late. You are allowed some time to get back on track, access to funding programs, or assistance in any other renting situation.

Additionally, the legal process called Ejectment is skipped, and the Seller will go straight to Landlord-Tenant Court in order to evict you. This results in less time and rights available to you.

By going through a Rent-to-Own program, you still run the risk of losing your contract, but they are more lenient regarding late rent. For example, Divvy allows up to three late payments before your contract is terminated.

Title Search and Insurance. There would be a title search in a conventional home buying process to ensure that what you’re investing in is yours. It also ensures that you’re not inheriting someone else’s outstanding debt that may be attached to the house.

If you’re using a program such as Divvy, they will likely conduct a Title Search because, if you walk away from the house (lease – option), they are responsible for the house.

Paying for Repairs, Maintenance, and Property Taxes. On top of paying a higher than market rent, the seller could expect you to pay additional bills that don’t comply with tenant rights laws.

This isn’t a fair trade because if you’re investing in the property and you miss one rent payment, you lose the money you invested and the house in your contract.

However, it is worth mentioning again that RTO programs like Divvy and Home Partners require that you do minor maintenance, but they will conduct any repairs to damages you or your visitors didn’t cause.


When entering a Rent-to-Own agreement, be aware of your rights and instincts. If the deal sounds too good to be true, then it probably is. However, in any Rent-to-Own agreement, hire a Real Estate agent or attorney to ensure that you are protected from any scams that you could run into.


How are people getting rent to own homes with rents of $400-$500 per month, no down payment, and 100% of the rent goes to building the down payment to buy? What seller would absorb the monthly costs of owning a home in order to sell it? – Quora

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