A lease option, sometimes called rent-to-own, pairs a lease with the tenant's right, but not obligation, to buy the property later at a price set in advance, usually in exchange for an upfront option fee and rent credits toward the purchase. If the tenant does not exercise the option, the fee and credits are typically forfeited under the agreement's terms.
Why it matters
A lease option delays your payout and keeps you as landlord until the tenant decides whether to buy.