Nevertheless, Brett Furniss, president and owner of BDF Realty, a Charlotte, N.C.-based firm that specializes in rent-to-own properties, says there has been steady interest in these arrangements for the past few years.
"This isn't a new phenomenon," Furniss says. "When the market crashed in 2008, you started seeing more people looking at rent-to-own. I think the uptrend you are seeing now is because sellers realize that they can't sell their house for market value, so they are willing to entertain rent-to-own tenants, whereas in the past they just wanted to get the property sold. They still do want to get a house sold, but it's not a realistic thing anymore, so they want to look at other options."
"If you live in a property you can wait it out," he adds. "If it's vacant, you're just going to continue to make mortgage payments while the house sits on the market. Some people do that, but I think it's crazy. You want to market your home to the greatest number of people out there, and the greatest pool of people out there are renters and renters that want to be buyers. I don't know why you would continue to go after a diminishing pool of buyers who are so picky in this market. It is such a great buyers' market, and sellers are just getting killed."Under a rent-to-own arrangement, a seller agrees to take on a tenant with the understanding that they will have an option to buy the property at an agreed-upon price after an agreed-upon number of years. As part of that deal, there is typically an option-to-buy fee that can range from several hundred to several thousand dollars (be prepared for at least 5% of the home's market value). An added fee may also be tacked onto rent payments that goes toward at least a portion of the future down payment or purchase price.