How Does Divvy Rent-to-Own Compare to Renting?

Divvy’s program is a modern take on rent-to-own—we’ve taken the model and made it more equitable, improve transparency, and give everyone access to homeownership. Rent-to-own programs let you rent your home while you save up to buy it, but there are definitely some differences compared to traditional renting. Let’s take a look.

Monthly payments

Divvy’s program is a lease agreement—like renting—but one that’s designed to get you closer to homeownership with every rent payment. Your monthly payment looks a little different with Divvy because ~25% of it goes towards your future down payment. Here’s how it works:

  1. Divvy looks at comparable homes in the same area to create a fair market rent price
  2. Depending on the amount you put down in initial home savings, Divvy will calculate the amount you need to save to have a 5-10% down payment when you buy your home—putting more money down will lower your monthly payment

Your monthly payment can seem more expensive than traditional renting, but those home savings are all yours. Plus, your monthly savings will benefit from the same appreciation rate as your home. If your home costs $100,000 today and you’re planning to buy it back for $109,000, your home savings will see the same 3% growth year over year. You can think of it as a high-yield savings account. 

Home quality

A huge benefit of Divvy’s program is that you’re choosing a home for sale, rather than a home for rent. Homes for sale tend to be better maintained and of a higher standard—so you’re able to live in a beautiful home from day one.

As a quick exercise, take a look at homes both for sale and for rent in your area on Zillow or Redfin—you’ll probably see higher quality homes listed for sale than for rent. With Divvy, you’re able to live in a high quality home while you save up to buy it.

Repairs, maintenance, and renovations

During your three-year lease, Divvy will manage all maintenance and repairs to keep your home safe and habitable—if you have an issue with your roof or furnace, we’ll get it fixed.

Unlike a traditional lease, we want our future homeowners to make their home their own. If you want to, we encourage you to paint, change the kitchen cabinets, or redo the floors. Since we’re still financially responsible for the home while you rent it, we don’t allow larger scale renovations or changes that require a permit—like changes to the roof, structure, electrical, mechanical, or plumbing systems. 

We want your home to feel like your own, and we always celebrate our customers getting more into the homeowner mindset.

Trying out homeownership

You can view the Divvy program like a test drive for homeownership—you get to choose your dream home, make it your own, and get an understanding of some of the requirements of homeownership all while renting. If your home doesn’t work for you or your family, you can walk away and cash out your savings. During your three-year lease, you’ll be able to get a sense of the space, see if the neighborhood meets your needs, and figure out if the home will work for you long-term.

Does the Divvy program sound like a good fit? Get started on your homeownership journey today!

4 thoughts on “How Does Divvy Rent-to-Own Compare to Renting?

    1. Hi Judith, yes! Our program helps get customers set up for homeownership within three years, but you’re able to buy the home back whenever you’re ready with no penalties. We actually have two buyback prices which will be agreed upon before you sign your lease—if you buy back within the first 18 months, you’ll get a discount! Let us know if you have any other questions.

    1. Hi Wendy, we can absolutely work with people moving to a city we serve in a new state, there’s no requirement to already be a resident of the state or city you’re looking to live in! Let us know if you have any other questions.

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