Investopedia

Continue to Site »

Rent To Own

Filed Under »
Dictionary Says

Definition of 'Rent To Own'

An arrangement between a consumer and a seller that allows the consumer to rent furniture, appliances and other goods for a defined period of time. The consumer is only responsible for paying the periodic rental fee for that defined time, which can be as short as a week or month, but may be continued if the consumer chooses to renew it. However, a condition in the rental agreement provides the consumer with an opportunity to purchase the rented goods by continuing to pay the rental fee for a length of time or by paying a lump sum payment.
Investopedia Says

Investopedia explains 'Rent To Own'

Rent-to-own arrangements are popular because they allow consumers with inadequate credit to get immediate use of expensive good without providing a down payment. They also allow consumers to try something out before committing (such as a TV).

Unfortunately, as good as this arrangement appears, it does have several drawbacks. For example, consumers are often left paying twice as much, if not more, for owning the rented goods than they would have if they had bought them outright.

Articles Of Interest

  1.

    Retirement Living: Renting Vs. Home Ownership

    Here are three simple questions you should consider when weighing this decision.

  2. 4 Alternatives To A Traditional Mortgage

    If you can't qualify for or don't want a traditional mortgage, one of these options might be right for you.

  3. Rent-To-Own Real Estate Full Of Pitfalls

    Before you consider this type of arrangement, you should be aware of how it works, who benefits and the many things that can go wrong.

  4. Easy Ways To Cut Rental Costs

    If rent payments are crippling your finances, then read on to learn how to save your money.

  5. Take Advantage Of A Housing Crisis - Rent!

    When a housing crisis strikes, the big winners are often the renters.

  6. Are You Ready to Rent?

    If you think it's time to test your wings and leave your parents' nest, read on.

  7. To Rent Or Buy? There's More To It Than Money

    Your lifestyle, level of commitment and the trade-offs need to be carefully weighed.

  8. To Rent Or Buy? The Financial Issues

    Thinking of buying a home? We look at the initial and ongoing costs as well as the so-called benefits.

  9. Why Low-Income Citizens Should Avoid Payday Loans

    This article looks at short-term borrowing and why low-income citizens should avoid it.

  10. Peer-To-Peer Lending - Determining The Future Of Banking Across The World

    The peer-to-peer lending industry continues to flourish. What does this mean for the future of loans from banks?
comments powered by Disqus
Marketplace
Hot Definitions

  1. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  2. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  3. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  4. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  5. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.

  6. Lease To Own

    An arrangement where an individual enters into a lease agreement with an owner with the inclusion of a clause that typically gives the individual the right, but not the obligation, to purchase the item leased at a predefined price and time.
Trading Center