There may come a time in your life when you want to buy something that is expensive; Something that is currently out of your budget. It may be some high-end equipment or gadget, and maybe even a home. Unfortunately, aside from not having enough cash to fund your purchase, you may also not have enough credit to secure it. Luckily, there is an alternative option for those who are not able to buy in one go, or for those who cannot mortgage traditionally. You can do this through an agreement called “Rent-to-Own.”

rent to own for houses
Buying a house is a big expense. Rent to own may be a good option to increase cash flow. – Photo by Karolina Grabowska from Pexels

Typically, Rent-to-own is utilized for houses or real estate properties. It provides individuals without a mortgage extra time to save money in order to purchase a home.

There are two parts to a rent-to own-agreement:

1. Standard Lease Agreement

Basically, this means that the ownership of the house is with the landlord until the person renting the house fully purchases the property.

2. The Choice on Whether or Not to Buy

This grants the tenant the option to purchase the property after a given time in exchange for a fee. The fee is usually paid upfront or in the form of higher-than-market rent and is often non-refundable. The price of the fee is often negotiable because there is no standard rate for it yet. However, it usually ranges from 1 to 5 percent, and sometimes 2 to 7 percent, of the purchase price.

So, what makes a rent-to-own agreement different from traditional renting?

Here are a few ways to differentiate the two:

1. Payment of Rent Differs

Similar to a traditional rental agreement, the tenant of course has to settle payments on time with their rent. However, with rent-to-own, rent payments are usually higher as compared to traditional rent. This is because a percentage of monthly rent is agreed upon to be placed in an escrow account, which is a legal agreement wherein a third party holds the money until the rent has been fulfilled.

The landlord saves the escrow funds and refunds the tenant once he purchases the property. By doing this, the tenant builds equity in the house throughout his duration on the lease agreement.

2. Tenant Repairs the Property

rent-to-own property
A rent-to-own property is going to be yours someday, so take good care of it.

In a traditional rental agreement, the landlord makes the necessary repairs before he rents out the property. With a rent-to-own set-up, it is the tenant who makes the necessary repairs since he will be the one to own the property eventually.

3. Under the Landlord’s rules unless the tenant owns the property

Unless the tenant has fully purchased the property, he must comply with the rules made by the landlord. Some rules could include not having pets inside the property, not engaging in anything that would harm or destroy the property, etcetera. If ever rules would be violated then the option to purchase the property after renting will be void.

4. Thoroughly Inspect the Property and Order Appraisal

Even if you do not end up purchasing the property, it is still important to double-check what you will be getting yourself into. This is because the purchase price of the property is usually agreed upon when the rent-to-own agreement is signed. Having an appraisal will make sure that you are paying a reasonable price for the property. In addition to this, thoroughly inspecting the property will allow you to be aware of anything that needs to be repaired. This will help you decide on whether or not you will continue with the rent-to-own agreement.

How would you know if this type of set-up is for you? Here are ways to find out:

First, as mentioned earlier, if you are someone who is interested in owning a house but do not have enough credit, renting to own could be a good option for you. This arrangement would allow you to invest and build equity in a property while being open to the option to continue your lease or to walk away. There could be unforeseen situations wherein you can no longer continue with your lease. For example, your financial situation getting worse, or maybe you simply are no longer interested in living in that property; you would be free to stop doing so with a rent-to-own arrangement. In addition to this, not purchasing the property after renting would not impact your credit history at all.

Other than property, you can actually rent-to-own other things as well. Are there things that you would like to buy that are out of your budget for you to pay in full? Have you also ever been interested in buying a product but you weren’t a hundred percent sure that the product was the right one for you? Rent-to-own allows you to pay in smaller amounts first and then have the option to buy the item after a period of renting. In addition to this, you can test out the product for a while before deciding on whether or not you will decide to own it.

iRent Mo homepage
iRent Mo offers a plethora of useful items that you can rent-to-own.

If you are interested in renting to own products, iRent Mo, an online rental marketplace, has a variety of things to choose from. You can learn more about the company here.

Here is a list of rent-to-own items from iRent Mo:

If you are set on renting something, here is how it will work:

At iRent Mo, their rent-to-own process is similar to installment payments. This means that you pay in small portions of money within a period of time until the payment has been completed. Depending on the item, rent-to-own items are usually payable within 3 to 5 months. After completing your payment within this period of time (depending on your contract), you can choose to own the item.

Interested in renting anything from iRent Mo? Here is a step by step process on how to do so:

1. Browsing your items

To browse the items, you can click on the links above or check out their website.

2. Adding to Cart

Once you have selected your items, add them to your cart. You will see how much your item/s will cost in total.

3. Check Out

Once you are sure you will be renting your selected items, check out. Once this is done, you will be sent an e-mail for your breakdown of payment.

4. Submit Requirements

Once you have seen the e-mail, you will be asked for additional information or documents that need to be submitted before proceeding with the transaction. Submit these via email then wait for approval; this usually takes around 2-3 business days.

6. Sign the Agreement

If you are approved for the rent-to-own item, an agreement/contract will be emailed to you. Sign the agreement/contract and return via email. After doing these, your item will be ready to be delivered to you.

7. Schedule Delivery

The delivery schedule will be dependent on their delivery schedule. This will be coordinated with you.

8. Initial Payment

Once the item has been delivered, settle your initial payment. You can do this through cash on delivery or bank transfer.

9. Monthly Payment

Payment will be done monthly and to be reminded of this, you will be given a schedule that would help you keep track of when to pay next. Monthly payments can be done through bank deposits, Palawan express, and GCash.

10. Own it!

After all your monthly payments are done, congratulations! You can choose to own the item if you enjoyed using it during the time that you’ve rented it. There are no extra fees and charges when it comes to owning the item.

rent to own categories at irent mo
Own items by renting – this provides regular people like us a chance to own things we usually cannot afford by regular means.

With renting to own, buying expensive things does not have to be expensive at all. It is amazing that we now have the flexibility of paying for big items in small amounts of time. Instead of committing to an expensive item that we are unsure of, we can now rent-to-own to test out things at our own pace. The next time you are unsure of buying something big, try checking and exploring a rent-to-own option instead!


Escrow: What Is It, And How Does It Work?” Rocket Mortgage.
Folger, Jean. “Rent-to-Own Homes: How the Process Works.” Investopedia, Investopedia, 11 Jan. 2021.
Nolo. “The Basics of Rent-to-Own Agreements.”, Nolo, 12 June 2014.

Own Items by Renting. How Does Rent-to-Own Work?