Is your credit score holding you back from getting a home loan? Are you struggling to come up with a down payment? Then the Rent-to-Own option may be the perfect solution for you.

When you Rent-to-Own a property, the agreement combines aspects of a purchase and a standard rental agreement. In most ways, it will feel like a rental agreement with a landlord, but with a key difference: you’ll be responsible for property taxes, homeowner’s insurance, and maintenance expenses. In return, you’ll have the option to own the property once the principal balance is paid off.

How the Numbers Work

The specifics of each deal may vary, but the general formula looks like this:

Purchase Price – Down Payment = Principal Balance
Principal + Interest = Monthly Payment

In some cases, we’ll start with the purchase price, while in others, we may begin with your desired monthly payment amount and work backward. After your application is approved and a property is identified that meets your criteria, we’ll finalize the exact numbers for your specific deal.

Keep in mind that in addition to the monthly payments, you’ll need to cover utilities, maintenance, property taxes, and homeowner’s insurance.

Building Equity

The only way to benefit from the equity is by paying off your principal balance through monthly installments. Selling the property or cashing out on appreciation before the balance is paid off is restricted.

Here’s why:

There will be a clause in your agreement specifying that if the principal balance exceeds $10,000, the purchase price will be adjusted to match market value for early payoffs. Additionally, you will not be allowed to resell the property within one year of fully paying it off.

This ensures fairness in the Rent-to-Own system, preventing tenants from flipping properties without sufficient credit or down payments. Essentially, equity is retained by Connect Property Management unless it’s earned through the standard monthly payment schedule.

If the remaining balance is less than $10,000, you can pay it off without any market value adjustment. However, early payoff or selling to another buyer before one year will result in either a market value adjustment or retaining the original purchase price—whichever is higher.

Where to Begin

To qualify, you must complete the rental application process, just like any other tenant. All adult occupants must be on the lease, though we can structure the agreement so only one individual exercises the option to purchase. This allows for flexibility with roommates while ensuring the ownership rights are designated to specific individuals.

As people move in or out, lease addendums and new rental applications will need to be processed. Only those you designate will have ownership rights once the principal is paid off.

Visit our Rental Application page to get started. Please review the qualifications carefully to ensure you’re ready and eligible to apply. Application fees are non-refundable, as they cover administrative costs.

Shopping for Your Home

Once your application is approved, you’ll be ready to start shopping for a home. We may present you with some options, but you’re also welcome to bring properties to our attention.

Your approved application will act as a pre-approval, allowing us to begin the process of securing a property that meets your criteria. We encourage you to schedule viewings and explore your options. When you find the perfect property, let us know, and we’ll pursue it for you!

Ready to take the next step? Connect Property Management is here to help you make your homeownership dreams a reality!