Rent to Own for Investors: 5 Reasons It Should Be in Your Portfolio
- Wayne Hillier
- May 29
- 3 min read
Updated: Jun 2
By Wayne Hillier, Real Estate Investing Masters
May 29, 2025 | Edmonton, Alberta
If you're looking to get started in real estate investing but want a strategy that creates strong cash flow, attracts quality tenants, and builds win-win outcomes — Rent to Own (RTO) might be the answer.
I’ve done my fair share of RTO deals over the years, and while they aren't always smooth sailing, they’ve consistently helped me generate cash flow, reduce risk, and create massive wins for both me and my partners. But make no mistake — this blog isn’t written from the tenant buyer’s point of view. This is for investors like you who are thinking, “Should I add Rent to Own to my toolkit?”
Here are 5 reasons why I believe every investor should consider doing at least one Rent to Own deal.
1. Higher Cash Flow Than Traditional Rentals
In an RTO deal, you're collecting monthly rent plus an option fee from the tenant buyer — essentially a premium they pay for the right to purchase the home in the future. That option fee can add anywhere from $200–$500/month (or more) in cash flow.
That kind of buffer gives you more room to absorb vacancies, repairs, or rising expenses without losing sleep. In some cases, you’ll cash flow more on a Rent to Own than you would with a suited property.
2. Tenants Who Think Like Homeowners
Tenant buyers aren’t renters — they’re future homeowners. They treat the property like it's their own because in their mind, it already is.
That means:
Less maintenance calls
More pride of ownership
Fewer headaches overall
They’ll often mow the lawn, shovel the snow, and sometimes even improve the home — all because they plan to buy it. From a landlord’s perspective, that’s a dream.
3. Predictable Exit Strategy and Built-In Appreciation
One of the most underrated benefits of Rent to Own is the pre-set sale price.
You agree upfront on what the property will sell for at the end of the term (usually 2–4 years), and you lock in a profitable exit. While market values might fluctuate, you’re not relying on appreciation — you’re baking your profits in at the start.
And if the tenant buyer can’t close? You still own the property, you’ve collected option fees, and you can resell or re-rent — often at a higher price than when you started.
4. Built-in JV Potential
Rent to Owns are ideal for Joint Ventures.
Why? Because the structure offers:
A clear start and end date
Defined returns
Reduced volatility
Limited involvement (since tenant buyers are often lower maintenance)
This makes RTOs highly attractive for passive JV partners who want a known exit strategy and consistent monthly income.
5. A Strategy That Works in Flat or Rising Markets
One of the reasons I love RTO is that it’s market-resistant. While it works best in a modestly appreciating market, it also performs well in flat markets where traditional appreciation plays don’t cut it.
You’re getting your profit from the option fee, monthly premiums, and pre-set sale price — not from waiting and hoping the market goes up. It gives you control over your investment and the ability to create your own momentum.
Final Thoughts
Is Rent to Own perfect? No. Like any strategy, it comes with risks — especially if you don’t screen your tenant buyers properly or skip out on clear contracts.
But if done right, it can be one of the safest, most win-win strategies in your real estate investing toolbox.
I always tell my students: Don’t just think like a landlord. Think like a problem solver. And Rent to Own is a powerful way to solve real problems — for families and for your portfolio. Looking for a FREE Crash Course in Rent To Own?
Check out this episode of the Real Estate Investing Morning Show:
– Hosted by Wayne & Gabby Hillier
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