1530 - For many buyers without cash or with credit problems, the solution to homeownership in the past has been a lease-to-own contract. The traditional wisdom behind this arrangement has been that the buyer is able to rent the property from an owner for a designated time period, usually paying a rent higher than market rate. The extra cash is then applied to an agreed upon down payment amount. In the end, once the down payment is acquired (and hopefully a better credit rating for the buyer with time), the transaction is consummated with a settlement and the property exchanges hands. I've received numerous letters from readers asking how this arrangement works. It depends on the wants and needs of both the buyer and the seller. If a buyer needs cash for the down payment, then the lease to own is a possibility. Here's how it works. To build up a 5 percent down payment for a $200,000 purchase, the lease agreement would include rent, plus an additional premium on the rent that will be used to build up the down payment. The amount of the premium depends on how much the buyer/renter wants to save and how much he can afford to set aside. Read this Nemmar Real Estate Training article at Tenants, Landlords, Multifamily, Commercial