A third option exists in between renting and owning a home; these are rent-to-own houses. This option offers some of the benefits of either renting or buying a house, but there are also drawbacks. Keep reading to learn if rent-to-own houses are a good option for you.

Rent-to-own houses have several good aspects, including the ability to try living in a home before buying it and the lack of need for a large down payment. It is not uncommon for owners to discover undesirable characteristics of a home or its neighborhood after moving in, which they were unable to detect before buying it; a rent-to-own property gives you the option to change your mind about buying it. When renting houses of this type, part of each monthly payment goes toward purchasing them. It also eliminates the need to obtain a mortgage from a bank to begin living in the home.

However, houses with a rent-to-own option do have some disadvantages and are sometimes fraudulent. A substantial deposit toward the home’s price must be paid when you start renting one; according to LawNY.org, this is generally 2.5-7 percent of the price and often cannot be refunded. It also indicates that the renter is usually required to pay for maintenance, unlike with most other rental properties. Thus, the renter may be putting at risk the cost of maintenance, the initial deposit, and the monthly payments. To some extent, the owner has incentive to evict even a good renter, whereas a traditional landlord or mortgage lender does not.

There is a serious potential for rent-to-own offers to have unfair or deceptive terms. A brochure on SCjustice.org warns that the home owner might unfairly evict the renter and keep all of the payments, and points out that the property owner’s bank may foreclose upon the property regardless of payments the renter is making. It recommends that potential rent-to-own customers ask a lawyer to examine all papers prior to signing them, and conduct a title search to ensure that the person offering the rent-to-own option is actually the property’s owner.

Basically, rent-to-own houses offer a few unique benefits and can be a good option for people in some types of financial situations; on the other hand, they have a greater overall cost than houses which are purchased initially, and aren’t as affordable to live in as homes which are being rented in a normal manner.