1. What is Rent-to-Own?

Rent-to-own is a real estate agreement where tenants rent a property with the option to buy it later. A portion of the rent payments may go toward the eventual purchase price.

2. How Does the Calculator Work?

The calculator uses the rent-to-own formula:

Where:

• Purchase Price — Agreed future purchase price of the property
• Interest — Total interest over the term
• Down Payment — Initial payment made at signing
• Months — Duration of the rent-to-own agreement

Explanation: This calculates the fixed monthly payment that covers both rental and purchase components.

3. Texas Rent-to-Own Regulations

Details: Texas has specific laws governing rent-to-own agreements. The agreement must clearly state terms including purchase price, option fee, and rent credits.

4. Using the Calculator

Tips: Enter all amounts in USD. The down payment is subtracted from the total amount financed. Months should be the full term of the agreement.

5. Frequently Asked Questions (FAQ)

Q1: What's typical for Texas rent-to-own terms?
A: Terms typically range 1-3 years, with 1-5% of purchase price as option fee, and 10-20% rent premium credited toward purchase.

Q2: Are rent-to-own payments tax deductible?
A: The rent portion may be deductible as rental expense, while option payments are not deductible until purchase.

Q3: What happens if I don't buy at the end?
A: Typically you forfeit the option money and any rent credits, unless the agreement specifies otherwise.

Q4: Can the purchase price change?
A: In Texas, the price must be fixed or determinable when the contract is signed.

Q5: Who maintains the property during the term?
A: Unless specified otherwise, the tenant is typically responsible for maintenance in rent-to-own agreements.