Pros and Cons of Rent To Own Homes in NYC

By: ROS Team

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Rental rates continue to trend upward every year whether we like it or not. When looking for an apartment to rent, one might consider making better use of monthly resources.

Introducing rent to own homes, a living concept that hasn’t always appealed to New Yorkers in the past but is now gaining traction thanks to new developments around the city.

What is rent to own homes are and what’s so great about them? We’ve compiled a brief overview of rent to own apartments along with a few pros and cons to consider before investing in one.

1- What is Rent to Own
2- Pros of Sellers
3- Cons of Sellers
4- Pros of Buyers
5- Cons of Buyers
6- How Rent To Own Arrangements Work


The Pros and Cons of Rent-to-Own Homes in NYC

What is Rent to Own?

A rent to own apartment is a kind of settlement in which you move in as a rent paying tenant but you have the option to buy the property later. While you have the option to buy, there is no obligation to buy. Rent to own homes is becoming popular because of the nature of the deal.

Pros and Cons of Rent to Own (For Sellers)


1. More Potential Buyers

If you are having a hard time finding buyers who offer rent to own terms, going the rent to own route might help your cause. It is an effective tool for attracting more buyers.

It is not commonplace in NYC real estate to find rent to own houses. So offering such a flexible option is going to catch the attention of more potential buyers.

2. Maximize Income

Another benefit for sellers in rent to own arrangements is they can maximize the money earned from their property. With the rent to own option, sellers can justify setting higher rent for tenants who have expressed an interest in buying the house. The additional funds can go towards the closing costs during the selling phase.

3. The Vested Interest of the Tenant

If profit does not convince you to offer rent to own this might be: in a rent to own arrangement, the tenant inherits interest paid in the property. So it’s in the tenant’s best interest to take extra care of the property while they’re renting.

The vested interest of the tenant:


1. Financial Loss

After living at the property for so many months or years, the tenant may decide not to buy the home after all. The tenant runs the risk of losing any money paid to the owner while staying there.

2. Long Process

The process to buy a rent to own house is long and you might run out of patience before you own the property.

3. No Authority Until You Owns it

Although you agreed to buy the house, you won’t have any real authority over the affairs of the property while you’re still under a lease-those privileges don’t kick in until your name is on the deed.

4. A Consequence of Late Payments

Sellers often include a clause in the lease agreement that states the tenant forfeits their right to buy the property if they’re late on their rent. That may be enough of an incentive to encourage consistent, on-time payments but there’s no guarantee.

What are the cons of rent-to-own homes?

Pros and Cons of Rent to Own (For Buyers)


1. Down Payment Installments

The chief advantage of this arrangement is the tenant pays towards the monthly mortgage. When the tenant pays rent every month, a certain portion can be allocated (as agreed mutually) towards the tenant’s down payment.

This allows the tenant to gradually pay the down payment instead of having to come up with the total all at once.

2. First Hand Experience

What can be more appealing than having the chance to experience life in a house before you decide to buy it? A rent to own arrangement provides an opportunity to get familiar with the neighborhood and surrounding area and gives you the chance to see if it’s a place you’d like to call home long term.

3. No Legal Obligation

As there is no legal obligation to buy the house, you can decline to purchase the house if the place doesn’t mesh well with your lifestyle.


1. Uncertainty

There’s no guarantee that the tenant will want to buy the property. If not, the homeowner will have to find a new tenant and start the process over again.

2. Down Payment

During a conventional home sale, the seller often receives a significant sum of money as the buyer’s down payment which can then be used to buy another property.

While in a rent to own home arrangement, the down payment is paid in installments over a long period of time. So you may not be able to afford to buy another property in the meantime.

3. Exposing Flaws

During the home inspection, most buyers are familiar with the operational or structural flaws of the property. This isn’t the case once they live in the house.

So, if there are such flaws in the home, it is highly likely that the tenant would decline to buy the property at the end of the lease.

How Rent To Own Arrangements Work

When a buyer wants to purchase a home, he or she may first want to experience what it’s like to live there. It may also be the case in which a buyer wanted to purchase the property but wasn’t approved for a loan from the bank.

If the buyer is confident he or she will get the loan in near future. A rent to own arrangement allows the tenant to live in the property in the meantime.

How Rent-to-Own Arrangements Work.

If the homeowner is willing to accept the terms of the sale. The owner may allow the potential buyer to move in as a tenant who will purchase the house in the future. The tenant and homeowner would then enter into a rent to own agreement.


Rent to own home arrangements provide a potential alternative to the traditional style of buying a home, and it’s almost a win-win situation for the buyer and seller. But definitely weigh the pros and cons of entering into this type of housing arrangement to evaluate whether it is a viable option for you.

Hopefully, now you know what rent to own homes are and why rent-to-own houses one should buy. Better luck with your decision.

Related Article:

Rent to Own Homes – Complete Guide
Rent to Own Agreement Best for You?
Complete Guide – Rent to Own Condos
Why Rent to Own Homes are Trending in NYC and How the Renting Process Works?