Rent-to-own is an exciting path to homeownership - one that gives you time to build your financial foundation while already living in the home you plan to purchase. While traditional home buying requires large upfront costs and immediate financing, rent-to-own offers flexibility, giving aspiring buyers a unique opportunity to save, plan, and prepare for the moment they officially make the home theirs.

Whether you’re just starting your rent-to-own journey or you’re already in your future home, here are six practical steps to help you save for the purchase ahead and make the most of your rent-to-own opportunity.

1. Assess Your Financial Situation

Before you map out your path to home-ownership, take a snapshot of your current finances.

• Review your income, monthly expenses, and debt. This will help you understand how much you can realistically set aside each month toward your eventual purchase.

• Check your credit score. While rent-to-own gives you time to improve your credit, understanding where you stand now can help you set realistic goals for financing when the time comes.

• Tackle high-interest debt (like credit cards) first. Reducing debt will not only increase your savings power but also improve your future loan terms.

Tip: Use free budgeting tools or financial apps to track your income and expenses, so you stay on top of your goals.

2. Set Realistic Homeownership Goals

In a rent-to-own arrangement, you usually lock in the purchase price of the home upfront - which is a major advantage. But it’s still important to define what homeownership will mean for your lifestyle and budget:

• Make sure your future mortgage (after purchase) will be affordable. The common rule is to keep your monthly housing costs under 30% of your income.

• Don’t forget additional costs: insurance, property taxes, and potential HOA fees.

• Understand what’s included in your rent today and what responsibilities (like maintenance or repairs) will shift to you once you become the owner.

Tip: Your goal isn’t just to buy the home - it’s to affordably own and maintain it for the long haul.

3. Create a Dedicated Savings Plan

Even in rent-to-own, you’ll eventually need funds to exercise your option to buy, cover closing costs, and potentially put down a mortgage down payment. The key is to start saving with a structured plan.

• Open a separate savings account just for your future home expenses.

• Automate transfers each month - even a small, consistent amount adds up over time.

• Factor in your option fee and rent credits. These will go toward the purchase price, so track them as part of your progress.

Tip: Keep a log of your total rent credits accumulated - it is motivating and keeps your eyes on the prize.

4. Look Into Financial Assistance Options

Rent-to-own tenants still have access to down payment assistance and first-time buyer programs when they’re ready to purchase.

• Check out federal, state, and local programs offering grants or tax incentives to help with closing costs.

• If you’re a teacher, first responder, veteran, service member or public service worker, you may qualify for special assistance.

• Some programs even allow penalty-free IRA withdrawals for first-time home purchases (but always consult a financial advisor before tapping retirement funds).

Tip: Research early so you know what support you might qualify for when the time to buy comes.

5. Choose the Right Savings Account

Not all savings accounts are created equal. To get the most out of your savings:

• High-yield savings accounts let your money grow faster and remain accessible.

• Certificates of deposit (CDs) can help if you’re saving for a fixed period and won’t need to touch the funds.

• Money market accounts may offer even higher returns if you’re able to keep a larger balance.

Tip: The sooner you move your savings to an account that works harder for you, the better positioned you’ll be come purchase time.

6. Trim Expenses and Maximize Savings

As a rent-to-own tenant, you’ve already made a big move toward home-ownership. Now it’s time to make the most of it by trimming unnecessary expenses:

• Cancel subscriptions you rarely use.

• Cook more meals at home and reduce takeout.

• Create a monthly budget that prioritizes your savings goals.

• Consider earning extra income through a side gig or selling unused items.

Tip: Think of every dollar saved as another step closer to owning the home you’re already living in.

A Home Worth Saving For

Living in a rent-to-own home gives you a powerful advantage - you’re not just preparing to own any house; you’re preparing to buy the house you’ve made a home.

Use this time wisely: track your savings, boost your credit, explore assistance programs, and build the habits of a financially ready homeowner. By the time your purchase date arrives, you’ll not only be ready…you’ll be confident.

And remember, you're not alone in this journey. Platforms like Renterlyst exist to support you and get you closer to your first home.