How Does Rent to Own/Lease Option Work?
It's simple really. You know how some people rent to own their furniture or TV's? Or even lease their cars? It's the same thing! They make a down payment, pay an agreed upon monthly payment and at the end of their lease term have the option to buy the couch or TV or car for an agreed upon price.

Rent to own is another way to say “lease option.” It means you are given the right or option to buy a home after a certain period of time. That is the main difference between you and a renter. A renter has no rights to the house when the lease is up. They can either move or renew the lease.

How Does Owner Financing Work?
Much the same way as rent to own except instead of having an option to buy the house at a set price at some point in the future, we have a purchase contract in place and you are actually buying the house. It's exactly the same process as buying a home and closing with a mortgage company, but in this case the seller IS the bank. All your payments are made to the seller at agreed upon terms and the home is in your name. This means that you get all the tax advantages associated with home ownership including mortgage interest deductions.