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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Rent-to-Own


Synonyms:rental purchase
Acronyms &
abbreviations:
RTO
Filed Under: financial-banking, legal-contracts, mortgages, real-estate
Tags: classifieds, property listing, realty, rental property
 

Definition of rent-to-own (RTO)

rent-to-own (RTO)
1. An arrangement where one makes periodic rental payments towards the eventual goal of purchasing an asset. Most often used to purchase consumer goods, rent-to-own arrangements can also be used to purchase real estate. Also known as a "rental purchase."

Related Terms and Acronyms:

  • lease (lse)   A written agreement in which the property owner allows a tenant to use property in exchange for rent, and for a specified period. Or, a written agreement in which a car dealer allows a consumer to use a vehicle in exchange for payments for a specified period.
  • purchase option   An agreement where a portion of monthly rent can be credited toward the purchase of a property.
  • rent   When one party pays another for the use of an asset, service or property.
  • rental agreement (RA)   A document that states the terms and conditions for tenancy of a dwelling.
  • seller carryback   A form of financing in which the seller of a property accepts a down payment and agrees to accept payments until the property is paid for.

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