Rent with option to buy is a clever idea. Buying a property needs lot of money, at least a ten percent down payment is needed for loans, apart from these monthly repayments have to be made. Repayments include interest plus principle. People who are ready for this only need to opt for buy option; else it is advised to rent a house with a buy option later. More and more people are opting for rent with option to buy because of insufficient funds or bad credit ratings. Owning a house means lot of unexpected expenditure, a house owner should be ready to spend on any kind of repair work, they need to pay taxes, insurance and maintain the house regularly, and on the other hand a renter does not incur any expenses other than just paying rents.

The never increasing deposits have made owning a house a far flung dream. The rise in interest rates and the increase in the down payments have made home owning very difficult. Lenders are unwilling to offer loans even to people who have a steady income. All this has pushed many to opt for rent with option to buy a lucrative offer. In recent years the craze for this scheme has increased and available of houses on rent and buy scheme have reduced drastically. The concept is simple, the seller is willing to sell and the renter is willing to buy the house. One added clause can change the tenant agreement into a rent to buy agreement. The renter needs to make a down payment and the balance is adjusted in the rent. The period of contract can vary from six months to twenty five years depending upon the requirement of both the buyer and the seller.

The rent is paid as per the market value and a little additional amount is paid towards the deposit. A first time buyer prefers this option, as they look for property of their choice and make an initial down payment. This scheme is best for people who do not have enough for huge down payments required by lenders or people with bad credit ratings. Rent with option to buy gives lot of strength to first time buyers. It gives them a chance to obtain equity in a sliding market too. Another interesting fact is that the renter is not controlled by changing interest rates. The renter pays only the amount specified in the contract in spite of growing rates. This scheme is very similar to test drive a property. It is just a trail run before actually possessing the property. The only demerit of the system is that in case the renter is not interested in buying the property he may have to forgo his deposit amount. The growing displeasure among home buyer and the lack of initiative by the state to provide adequate help to first time buyers has seen the increase in rent with option to buy in the past few years.