When you think of a place to live, what type of residence comes to mind? You most likely think of a single-family home with a yard where you and your immediate family live under one roof. Why would you most likely think of this type of residence? Because, according to a 2019 study, approximately 70% of Americans live in a single-family home (1).

In turn, when you think of renting-to-own a home, you most likely picture yourself living in a single-family home.

You may be surprised to know you can rent-to-own different types of properties other than single-family homes. In fact, you could sign a rent-to-own agreement for condos, co-ops, multi-family homes and even townhouses.

Which one is the best residence for which to sign a rent-to-own agreement? The answer may not be cut-and-dried, so it’s important to note the benefits and differences of each type of property and how they impact your lifestyle.

Single-Family Homes

Of course, single-family homes are the most common option for rent-to-own agreements, but it’s important to distinguish what exactly a single-family home is and how its various characteristics relate to rent-to-own agreements.

By definition, a single-family home is a detached building—meaning it’s a stand-alone structure that isn’t attached to any other building—built on a plot of land intended to lodge one, singular family.

Typically, single-family homes have front yards, backyards and their own, private garage. There may be some homeowners’ association (HOA) fees, too, depending on your subdivision. Subdivisions that feature clubhouses, community pools and community fitness centers commonly have HOA fees due every month. Often though, there are no HOA fees associated with single-family homes.

Single-family homes also come in all shapes and sizes. You could have a single-level ranch, a ranch with a basement, a two-story home, a two-story home with a basement, a tri-level home, homes with additions and so many other variations. Additionally, the square footage of a single-family home can vary from the hundreds of square feet to thousands of square feet.

What are the benefits to signing a rent-to-own agreement for a single-family home? The list is nearly endless.

If you find a forever home you love in a great neighborhood, but you just don’t have a great credit score to apply for a mortgage on the home, you can determine a set amount of time to lease the home with the seller. The time gives you the opportunity to raise your credit score. When the lease is up, you can apply for a good, affordable mortgage to allow you to buy the home and the property from the seller.

Plus, this extra time can allow you to save up more money for a down payment. Once you own the home, you can also remodel, design and decorate it however you would like. At that point, there wouldn’t be a landlord to tell you no, which is among the other rent-to-own benefits of choosing a single-family home.

Of course, once you own the home, you’ll then be responsible for all maintenance on the property and you’ll have to pay all the bills associated with the property such as taxes, electric, gas, cable and more.


Condominiums, better known as condos, are typically the second most common residence when it comes to signing rent-to-own agreements.

By definition, a condo is a unit within a larger building in which you live and that unit shares at least one wall with a neighboring unit.

Condos and apartments are very similar, but with a condo, you make a mortgage payment every month with the end goal of eventually owning the unit, whereas you pay rent every month in an apartment which tends to be a temporary residence.

Condos usually aren’t located in every city and town across the country, though. They’re most common in large cities or densely populated urban areas such as Chicago or New York City.

Part of the reason for this is it’s easier to build up in a city than out. Cities are usually cramped, so there isn’t too much room to build single-family homes, unless you’re on the outskirts of the city. Condo buildings are usually very tall with ample amounts of stories so they can accommodate hundreds of residents throughout their many units.

If you choose to sign a rent-to-own agreement for a condo, you need to make sure you’re invested in living in this condo for the long haul.

If you plan on having a family one day, does it make sense for you to try and raise children in the downtown areas of a big city? If you welcome an addition into your family, will you outgrow the square footage of your condo? Do you ever foresee yourself growing tired of the hustle and bustle of city life?

These are all things to consider because, once you lock yourself into a rent-to-own agreement for a condo, it would be worth your while to stay there for years down the line. If you decide to leave your condo after only one or two years of owning it, was it really financially worth the rent-part of the rent-to-own agreement? Only you can decide that.

If you do go through with a rent-to-own agreement on a condo, once you purchase the unit from the seller, it becomes similar to a single-family home. You can remodel it as you see fit, as long as it’s within the building code and regulations.

Plus, as a tenant of the condo building, you’ll be able to give your two cents when it comes to the happenings of your building. These happenings could be about hosting social events, new rules or restrictions to be put into place or they could be maintenance related.

Since a condo is a unit within a building, there are a lot of common areas that need to be maintained. Maintenance on common areas costs money to make sure they’re clean and functioning, especially if the area is a mechanical one such as an elevator. Therefore, you will pay HOA fees on top of your mortgage. These fees will be higher than other HOA fees for other types of residences.


A co-op, also known as a cooperative, is a very unique type of residence. It’s similar to a condo as these types of dwellings are more common in big cities and densely populated urban areas. Plus, you live in a singular unit within a larger building, but you don’t own the unit in which you’re living. You would jointly own the building with the other units’ tenants.

Whether you rent-to-own a co-op or go in with the intent of taking out a mortgage right away, the application process to be able to live in a co-op is intense.

There is a very detailed interview process that you have to go through with the current tenants or a board of certain tenants so they can see if you will be a good fit for their little community. Depending on how strict or lenient the co-op rules and regulations are, your application could be dismissed or you could be accepted easily. It all varies.

In a rent-to-own situation, depending on the lease rules in place at a co-op, you may be forced to rent for a specific amount of time; there may not be any wiggle room to negotiate how long your lease can last in the rent-portion of the rent-to-own agreement (2). You could also get hit with an additional fee while you’re in the rent-portion of the agreement.

It should also be noted that it’s much harder to get a mortgage loan for a co-op residence. Most banks look at co-ops as bad entities, which means they’re more reluctant to give you a loan once your own-portion of the rent-to-own agreement begins.

Another thing to keep in mind with a co-op is if one tenant is behind on their portion of the overall mortgage payment, everyone suffers because of it. Each tenant would either have to chip in more money or find a way to come up with their late tenant’s portion of the mortgage.

On the flip side, a co-op allows you to control who your neighbors are which should alleviate any neighborly tensions that could arise in any other housing situation. Plus, co-ops are typically less expensive than condos due to slightly lower HOA fees.

Multi-Family Homes

Were you concerned about the previously mentioned term of “single-family homes” because you have more than one family that needs to live under the same roof?

There’s no need to fret because there are such things multi-family homes. By definition, a multi-family home is a detached building—meaning a stand-alone structure—made up of four or fewer units on a plot of land that can house multiple families under one roof.

Multi-family homes can also be called duplexes, triplexes, two-flats or a twin-home. It should also be noted that if a multi-family home has more than four units, it will technically be considered a commercial building.

Most people that typically live in a multi-family home do so because they have extended family living with them. An advantage of living in a home like this with extended family is you’re able to assist family members that need help doing certain daily activities while still giving them the freedom to live their lives on their own.

Now, the other tenants don’t have to be family in a multi-family home. You could reside there and rent out the other units to complete strangers. In turn, the rent they pay you would help you make your monthly mortgage payments.

On the flip side, in a rent-to-own agreement, you may be the tenant that is living under the same roof as the seller as the seller waits to essentially transfer power of the property over to you. Most likely, you would also come to an agreement with the seller about who does what maintenance on the property. Since you would be living under the same roof as the seller, it’s important to do your part and chip in with the home’s responsibilities.

A downside to renting-to-own a multi-family house is you really won’t have a ton of privacy as multiple people and/or families are under the same roof and sharing walls and common areas with you.


Finally, one of the less common residences for rent-to-own agreements is a townhouse. By definition, a townhouse is an attached—as in connected to another building—single-family home that shares a wall with one or two other units.

Townhouses, also known as row houses, are usually multiple level structures. They don’t always come with a front or backyard—especially if the townhouse unit backs up to another row of units–though there are some that do have yard space. As a result, you tend to have more privacy in a townhouse than a place like a condo or co-op.

In a way, a townhouse is like a step-down from a single-family home. Depending on how involved the townhouse HOA is, you may not have to take care of certain maintenance tasks on your property such as snow removal, lawn mowing, garbage disposal and, in some cases, some mechanicals within your home.

As a result, HOA fees would be higher than other residences, but purchase prices of townhouses tend to be much lower than single-family homes.

A pro to renting-to-own a townhouse is, much like a condo or a single-family home, once you own the property, you can remodel the inside of it however you’d like, assuming it’s within building codes.

On the flip side, but also very much like a condo, you should be aware of how long you want to stay in a townhome. If it’s a temporary residence, trying to sign a rent-to-own agreement on the property most likely isn’t a good idea. If you want to spend an extended amount of time living in the townhouse, then signing the rent-to-own agreement could be the best option for you.

At the end of the day, it’s important to know you can sign a rent-to-own agreement for most types of properties–such as single-family homes, condos, co-ops, multi-family homes or townhouses—but you need to do your research to see which property is the best one for you.

Everyone is different. Everyone has specific wants and needs. Therefore, there’s no clear-cut answer on which type of residence is best for a rent-to-own agreement.


Additional Resources

(1)Homes for Heroes

(2) All Property Management