Rent-to-Own Contract example
A completed lease with option to buy: $1,650 monthly rent, $250 monthly rent credit, $7,500 option fee and a $245,000 price over 24 months.
This Agreement is made between Robert and Linda Chen, of 900 Birch Road, Columbus, OH 43215 (the "Landlord-Seller"), and Angela Brooks, of 15 Maple Court, Columbus, OH 43206 (the "Tenant-Buyer"), for the property at 412 Willow Avenue, Columbus, OH 43211 (the "Property"). It combines a residential lease with the purchase terms below.
1. Property. The Property is located at 412 Willow Avenue, Columbus, OH 43211, more fully described as: Parcel No. 010-123456, as recorded in the county records.
2. Lease term and rent. The lease begins on November 1, 2026 and ends on November 1, 2028. The Tenant-Buyer will pay rent of $1,650.00 per month, due on the first day of each month. The Tenant-Buyer will also pay a security deposit of $1,650.00, held and returned as required by law.
3. Purchase. The Landlord-Seller grants the Tenant-Buyer the exclusive option, but not the obligation, to buy the Property. The purchase price is $245,000.00.
4. Option fee. At signing, the Tenant-Buyer will pay an option fee of $7,500.00. The option fee is non-refundable, except if the Landlord-Seller fails to complete the sale. If the Tenant-Buyer buys the Property, the option fee will be credited toward the purchase price at closing.
5. Rent credits. For each monthly rent payment received on time, $250.00 will be credited toward the purchase price. Over a 24-month term, rent credits can total $6,000.00. If the lease ends because of the Tenant-Buyer's default, accumulated rent credits are forfeited.
| Month | Rent due | Rent | Rent credit | Credit to date |
|---|---|---|---|---|
| 1 | November 1, 2026 | $1,650.00 | $250.00 | $250.00 |
| 2 | December 1, 2026 | $1,650.00 | $250.00 | $500.00 |
| 3 | January 1, 2027 | $1,650.00 | $250.00 | $750.00 |
| 4 | February 1, 2027 | $1,650.00 | $250.00 | $1,000.00 |
| 5 | March 1, 2027 | $1,650.00 | $250.00 | $1,250.00 |
| 6 | April 1, 2027 | $1,650.00 | $250.00 | $1,500.00 |
| 7 | May 1, 2027 | $1,650.00 | $250.00 | $1,750.00 |
| 8 | June 1, 2027 | $1,650.00 | $250.00 | $2,000.00 |
| 9 | July 1, 2027 | $1,650.00 | $250.00 | $2,250.00 |
| 10 | August 1, 2027 | $1,650.00 | $250.00 | $2,500.00 |
| 11 | September 1, 2027 | $1,650.00 | $250.00 | $2,750.00 |
| 12 | October 1, 2027 | $1,650.00 | $250.00 | $3,000.00 |
| 13 | November 1, 2027 | $1,650.00 | $250.00 | $3,250.00 |
| 14 | December 1, 2027 | $1,650.00 | $250.00 | $3,500.00 |
| 15 | January 1, 2028 | $1,650.00 | $250.00 | $3,750.00 |
| 16 | February 1, 2028 | $1,650.00 | $250.00 | $4,000.00 |
| 17 | March 1, 2028 | $1,650.00 | $250.00 | $4,250.00 |
| 18 | April 1, 2028 | $1,650.00 | $250.00 | $4,500.00 |
| 19 | May 1, 2028 | $1,650.00 | $250.00 | $4,750.00 |
| 20 | June 1, 2028 | $1,650.00 | $250.00 | $5,000.00 |
| 21 | July 1, 2028 | $1,650.00 | $250.00 | $5,250.00 |
| 22 | August 1, 2028 | $1,650.00 | $250.00 | $5,500.00 |
| 23 | September 1, 2028 | $1,650.00 | $250.00 | $5,750.00 |
| 24 | October 1, 2028 | $1,650.00 | $250.00 | $6,000.00 |
6. Exercising the option. To buy the Property, the Tenant-Buyer must give the Landlord-Seller written notice by certified mail on or before October 1, 2028. If the option is not exercised by that date, it expires, and the parties' relationship continues only as a lease until the lease ends.
7. Closing. The sale will close on or before October 1, 2028. At closing, the Tenant-Buyer will pay the purchase price less the credits earned under this Agreement (estimated at $13,500.00, leaving $231,500.00). The Landlord-Seller will deliver title free of liens other than those the Tenant-Buyer accepts in writing. Financing is the Tenant-Buyer's responsibility.
8. Maintenance and repairs. The Tenant-Buyer is responsible for routine maintenance and minor repairs; the Landlord-Seller is responsible for major repairs to the structure, roof and building systems. The Tenant-Buyer will keep the Property in good condition and will not make structural changes without written consent.
9. Taxes, insurance and HOA. Property taxes are paid by the Landlord-Seller; homeowner's insurance on the building by the Landlord-Seller; any homeowners' association dues by the Landlord-Seller. The Tenant-Buyer is responsible for insuring personal belongings.
10. Default. Rent is late if not received within 5 days after its due date. If either party fails to meet a term of this Agreement and does not correct it within a reasonable time after written notice, the other party may pursue the remedies available under applicable law.
11. Inspections and disclosures. The Tenant-Buyer may have the Property inspected before signing and before closing. The Landlord-Seller will provide any disclosures required by law.
12. Recording and entire agreement. Either party may record a memorandum of this Agreement where permitted. This Agreement is the complete agreement between the parties, and any change must be in writing and signed by both.
13. Governing law. This Agreement is governed by the laws of the State of Ohio.
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How do you structure a rent-to-own contract?
A rent-to-own contract has two layers: a lease that runs now and a purchase that may happen later. Structure it in this order so each money term has a clear place.
- Identify the parties and the property. Use the owners' names exactly as they appear on the deed, and add the parcel number or legal description from county records.
- Choose option or purchase. Decide whether the tenant has the right to buy (lease with option) or both sides commit to the sale (lease-purchase).
- Set the lease terms. Enter the start and end dates, the monthly rent and the security deposit, as you would for a regular lease.
- Fix the purchase terms. Agree on the purchase price now, the option fee paid at signing and whether it is refundable and credited at closing.
- Add rent credits. Choose how much of each on-time rent payment counts toward the price. The generator builds a month-by-month credit schedule and Excel sheet.
- Split responsibilities and sign. Say who handles repairs, taxes, insurance and HOA dues, set the deadline to buy, then sign and keep copies.
What are the typical terms of a rent-to-own agreement?
Typical terms include a lease of one to three years, an upfront option fee, a purchase price fixed at signing, a monthly rent credit toward that price, a deadline to buy, and a split of repairs, taxes and insurance. The contract also says what happens to the fee and credits if the tenant does not buy.
None of these numbers is standard: the parties negotiate them. Write every amount in the contract so that nobody has to rely on memory two years later.
Lease purchase agreement vs. lease with option to buy
In a lease with option to buy, the tenant pays for the right to purchase but may walk away at the end of the lease, usually losing the option fee and rent credits. In a lease purchase agreement, both parties are committed to the sale, so a tenant who does not close may be in breach of contract.
Choose the variant above that matches your deal; the generator changes the purchase and option clauses accordingly. Some states treat certain rent-to-own arrangements as installment sales or apply extra consumer protections, so ask an attorney or your state housing agency how your deal will be treated.
Is a rent-to-own contract a good idea?
It can be, for both sides. A tenant gets time to build credit and savings while living in the home; a seller earns rent and a committed buyer. The risks are real: the tenant can lose the fee and credits, and the seller ties up the property. Clear written terms reduce disputes.
Each clause explained
- Purchase and option fee
- Fixes the price and the fee paid for the right to buy, and whether that fee is refundable or credited.
- Rent credits
- The part of each on-time payment that reduces the price at closing, and whether credits survive a default.
- Exercising the option and closing
- How and by when the tenant says they will buy, and how the balance is paid at closing.
- Maintenance, taxes and insurance
- Who pays for what while the tenant lives in a home they may later own.
- Inspections, disclosures and recording
- Protects the buyer before closing and lets either party record a memorandum where allowed.
Frequently asked questions
Can you write your own rental agreement?
Yes. Landlords and tenants commonly write their own rental agreements, and a template helps you cover the usual terms. Some states and cities require specific disclosures or wording, and rent-to-own deals add purchase terms with their own rules, so have a licensed attorney in your state review the final document before signing.
Is the option fee refundable?
Only if the contract says so. Many rent-to-own agreements make the option fee non-refundable but credit it toward the price if the tenant buys. The generator lets you choose both settings, and the wording in the contract changes to match. Write the choice down clearly, because it is a frequent source of disputes.
What happens to rent credits if the tenant does not buy?
That depends on the agreement. Under many lease-option contracts, unused rent credits stay with the seller when the tenant does not buy or defaults. This template includes an optional clause stating that credits are forfeited on default. Decide this before signing and state it explicitly, since it can involve significant money.
Is this rent-to-own contract template free?
Yes. You can fill in the template online, review the live preview and download the contract as a Word or PDF file, plus an Excel rent credit schedule, at no cost and without an account or watermark. The document is generated in your browser, so your information is not sent to our servers.