Lease options

Rent-to-own deals can have pitfalls

Almost every cable TV real-estate guru pitches them as great moneymaking techniques: lease-option contracts, also known as ''rent-to-own'' programs.

In some metropolitan areas, lawn signs, telephone poles and newspaper advertisements hawk them aggressively to modest-income and credit-challenged consumers who want to buy a home. Stripped to its basics, the lease-option concept is sound: Buyers who have imperfect credit histories or insufficient cash for a down payment on a standard mortgage can rent a house for one or two years, pay a fee to the landlord for the right to purchase the property at a set price during the lease term and even have portions of the monthly rent count toward a down payment.

Caution urged in 'rent-to-own' home contracts [Miami Herald]