How the purchase price of the house you're renting to own can vary as well. Some contracts stipulate that the purchase price will stay what it was when the initial contract was signed, while others have it be the market value of the house at the time of purchase. Some contracts eschew each of these for a different method entirely, having the purchase price go up a certain percentage every year of the lease. Rent-to-owners can decide to buy the house any year of that lease.
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The second method starts with a tenant who wants to RTO a property and wants to buy it out at the end of the contract's term. An investor will then match the tenant to a property that works with their budget. When they locate a property, they can collaborate to close the deal, and the tenant can purchase the property on an RTO basis. This method works out well for real estate investors as they don't own the home, they're just acting as brokers to find the tenant their RTO property.

Rent-to-own homes will typically cost a bit more than the fair market value of other home rentals in the area. That’s because a portion of the monthly rent-to-own payment will be designated as a “rent credit” -- up to 20 percent of the monthly amount due -- will go toward the purchase of the home when the agreed-upon term expires. It’s important to make these monthly rent-to-own payments on time and as scheduled.

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Personally, I feel that they are an exceptionally bad deal for the "buyer", and should be avoided at all cost. Unfortunately, they target people who have bad credit and no options to purchase a home through conventional means. People in this situation are often in love with the idea of owning their own home, and out of desperation get involved in these "deals"
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One of the challenges of rent-to-own contracts is that there is no uniform agreement for parties to use—unlike what you’d expect with traditional, state-sanctioned lease or purchase and sale agreements. In fact, rent-to-own agreements are rarely regulated by the government. As a result, rent-to-own agreements can look markedly different from transaction to transaction, with the property owner nearly always retaining the upper hand.
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What happens when you find the home of your dreams but aren’t quite ready to take out a loan and accept responsibility for a mortgage and property upkeep expenses? You hope there’s a rent-to-own option. This type of contract allows you to rent the home for a designated period of time with the understanding that you can purchase the home near the end of the contract. This gives you time to adjust to your new neighborhood and shop around for the best lender to service your mortgage application. You can end up in a better financial position for taking that time, and you don’t lose out on the home since you get to move in right away as a renter.

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