Rent-to-own (RTO) is a homeownership model that allows renters to lease a property with the option to purchase it after a set period, typically 2-5 years. Part of your rent goes toward the eventual down payment or purchase price.
How It Works:
Lease Agreement: You rent the property as usual, but the contract includes an option to buy.
Option Fee: You pay a one-time, non-refundable fee (1–5% of home price) to secure the right to purchase.
Monthly Rent: Higher than typical rent, with a portion (called rent credit) going toward the future purchase.
Purchase Decision: At the end of the lease, you can choose to buy the home or walk away.
Pros of Rent-to-Own
Buy time to improve credit or savings
Lock in today’s home price (which can be an advantage in rising markets)
Test the neighborhood before fully committing
Build equity gradually while renting
Cons to Consider
Non-refundable fees if you don’t buy
You may still need a mortgage later
Risk of overpaying if the market value drops
You’re responsible for maintenance (in many cases)
Who Should Consider Rent-to-Own?
First-time buyers who need to build up a down payment
Self-employed individuals who struggle with bank approval
Diaspora clients are waiting to relocate but want to lock in a home now
Buyers with credit challenges are working to improve their score
Tips Before You Sign a Rent-to-Own Agreement:
Hire a real estate lawyer to review the contract
Ask about what’s refundable and what’s not
Understand your maintenance responsibilities
Get a home inspection even before signing
Is Rent-to-Own Popular in 2025?
Yes. With rising interest rates and tighter mortgage requirements, many Kenyans and global buyers are embracing flexible ownership models like RTO. Developers are even offering rent-to-own apartments and townhouses in popular areas like Athi River, Syokimau, and Juja.
Final Thoughts
Rent-to-own offers aspiring homeowners a flexible route to ownership, especially in today’s financial climate. But it’s not one-size-fits-all. Know the risks, run the numbers, and make sure it aligns with your long-term goals.
