Jun 26, 2023

Lease-to-Own Options for Home Buyers

by Godrej Properties Limited



Purchasing a home is a significant milestone in many people's lives, but it can be challenging for some individuals to qualify for a traditional mortgage due to various reasons. In such cases, a lease-to-own option can provide an alternative path to homeownership. Lease-to-own homes, also known as rent-to-own or lease-to-buy homes, have gained popularity in the Indian real estate market as they offer an opportunity to build a credit history and improve credit scores during the lease period. 

When you choose luxury projects like Godrej Athena in Bangalore or Godrej Bliss in Mumbai, your ROI on real estate investing will be significantly higher.  Read this blog to know all about contract lease with option to purchase. 

How Lease-To-Buy Option Work for Home Buyers

Here are some practical benefits of choosing the lease option in real estate investing in India:

Increased Access to Homeownership

In India, where mortgage requirements can be stringent, lease option agreements allow aspiring homeowners to build equity and work towards purchasing the property over time.

According to recent data from real estate experts, lease-to-own homes have become appealing, with a significant rise in demand. In major cities such as Pune, NCR, and Bangalore, there has been a notable increase in the number of lease-to-own properties available, addressing the needs of a growing segment of potential buyers.

Flexibility and Lower Initial Costs

A lease option with a purchase clause involves a period during which the buyer rents the property, with an option to purchase it at a pre-determined price within a specified timeframe. This arrangement allows buyers to save for a down payment, improve credit scores, or fulfil other financial requirements before committing to a mortgage.

Opportunity to Test the Property

During the lease period, tenants can experience living in the house, understand its features, and evaluate its suitability for their needs. This "try-before-you-buy" approach helps buyers make informed decisions, reducing the risk of making a long-term investment in a property that may not meet their expectations.

Potential for Equity Building

As buyers make rental payments during the lease period, a portion of the payment may be credited toward the eventual purchase price. This enables tenants to build equity over time, effectively reducing the amount needed for a down payment when they exercise their option to buy the property.

Bottom Line

While a lease option to buy homes present significant advantages, seeking legal advice and conducting due diligence ensure a smooth transition from renting to homeownership.



1. What is a lease option to own a home?

A lease-to-buy home is an arrangement where a tenant/buyer signs a lease agreement with the option to buy the property at a set price within a specified timeframe. 

2. How is the purchase price determined in a lease option contract?

The purchase price is negotiated between the buyer and the seller at the beginning of the agreement. It may be based on current market value or a formula agreed upon by both parties.

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