Interesting concept.

One advantage of being a renter is that it allows flexibility to move quickly. Getting involved in this kind of arrangement means a legal hassle when making that move. My motto is: If you can't see yourself being planted for five years, don't buy! So I would not want a rent-to-own arrangement like this.

If I were a property owner, I would not want to sell in this way. I would prefer to the money out now, and not have to worry about the renter making those payments.

You might want to take a look at Islamic banking, which some Canadians banks have adopted. Because Islam has a prohibition against usury (and many Muslims obey this law), the banks have a different arrangement for mortgages. The renters are actually in a rent-to-own situation like you have described. As time passes, the renter "owns" more of the property. But the deed is not officially turned over until the mortgage is paid in full. In this way, neither the resident nor banker is engaged in usury. It is just a business deal.

The arrangement takes care of things like non-payment and moving out, so the owner-renter and owner-banker are fairly compensated in these situations.

I'm pretty sure there is some usury worked into the rental rate. But on paper, there is no usury.

Sorry, I have no quick link for you.