An inside look at Chicago real estate

Rent-to-Own Homes: No Nest Egg Needed

Mark.Miles By
Mark Miles
   | Rental Market

A new construction condominium development in United Center Park is offering Chicago home buyers a rare rent-to-own option that gives purchasers time to save up for a down payment while living in their new home. The rent-to-own deal is offered through Dream Town Realty (details are available by contacting Ken Monarrez at 312-543-8256 or This type of financing opportunity is still fairly uncommon in the Chicago housing market, but it comes at a time when the home buyers are in need of a new alternative to achieve their home ownership dreams.

Following the subprime mortgage fiasco, it became much harder for people without money for a down payment to purchase property. In the “old days,” everyone was used to saving up thousands before even thinking about buying a house. However, after a stretch where zero percent down was acceptable and lenders were providing 100% of the funds to buy residential real estate, homebuyers got accustomed to needing very little cash up front.

But times have changed, as they always do, and now most lending institutions require at least 3% down to purchase a home. That means, if you want to buy a $300,000 house or condo, you must be able to come up with a minimum of $9,000 for the down payment in order to get a loan.

For many, it can be difficult to put away that much while paying rent on an apartment. However, if you were able to set aside your rent money each month, as opposed to giving it to a landlord, accumulating enough for a down payment would be much more feasible. That’s the whole concept behind rent-to-own financing. It allows home buyers to save up for buying a home without having to worry about paying rent at the same time.

The basic rent-to-own option is simple: a home buyer signs a purchase agreement that permits them to move into the new property before actually buying it. Then, for an allotted amount of time (generally six months to a year), the occupant “pays rent” on the home, which is collected to be used as a down payment on the property they are already living in. Depending on the contract, the full rent amount or a portion of the rent is reserved for this purpose. During the “renting” period, buyers can build up a substantial amount to put towards the home. The additional lease phase can give buyers time to improve credit scores, which typically garners better mortgage rates, saving home purchasers even more money in the end.

There may be an option fee in association with taking the home off real estate listings, but the charge runs between one and two percent and can usually be put toward the down payment as well.

Rent-to-own is a great opportunity for anyone ready to move into their own home now, but needs a little extra time to save up.


  1. Jon Kerr ·

    Terrific posting. I represent investors marketing Rent-To-Own properties. I see this strategy as a win-win for both sides. First, it helps individuals who want to own a home, yet can’t because of financing restrictions. Rather than continue to throw money away in a straight rental, they can build equity in a home while the rent. The equity is in the credits they earn each month when they make an on time rent payment, plus the upfront option fee. This is a huge point of difference with tenants. Once they see this, they get it. For the investor, it’s a win because you have a sound exit strategy. I’d much rather be building a relationship with a tenant that I know will buy my property than the alternative. The more you can control your entry point and flip, the wiser the investment.
    Jon Kerr
    Platinum Wealth Group
    Chicago, IL

  2. I think you missed one other positive of the rent-to-own approach: it is the ulimate test drive.
    Get to know the property, the condo assocition, the neighborhood in a way
    not possible by stopping buy and looking at a property. While there will be cost for
    not buying the property, it will be far less then it would cost you to resell the property.
    This does not mean potential buyer should not do their research in advance, just that it is nice to have a simple out if it does not work.

  3. Marisol Campagnini ·

    Is there any rent to own condos avalable.

  4. Lou ·

    Ive love reading your blog, it really made sense and i am enjoying everything in here. keep posting more

  5. Yes! This blog really helps us to have our own home.You are offering the great deals for us looking for a new home without any down payment needed to move in a new home.This is a great idea owning your home in a rent to own way.

  6. real estate agents Toronto ·

    I am looking to rent a condo unit. That’s why ive been looking for blogs to see the detailed info.

  7. I think “rent to own homes” is the most convenient way in getting your own home. Especially when it comes to monetary issues.

  8. Theres best place to find Rent to Own Homes listings, Lease to Own Homes, and advice for buyers!

  9. Christina ·

    Also rent to own is such a viable option for both buyers and sellers in today’s market because there is such a great pool of better than average buyers and a vast amount of better than average homes that are willing to rent to own.
    All the best –

  10. Shirley Voss ·

    Looking to rent in Chicago, by the Lake, from Museum Campus to Uptown. Two 60lb dogs. Most space (700sqft min) and amenities for the price. Prefer pool, balcony, in unit laundry. Budget $1500/month. Must be safe area! Cute neighborhood with shops & cafés. Suggestions????