The concept involves acquiring a compact dwelling through a lease agreement with an option to purchase at a later date. Payments are structured so that a portion contributes towards eventual ownership. For example, an individual might lease a small, pre-fabricated residence situated on a rented lot, with a contractual agreement stipulating the conditions under which the lessee can eventually buy the dwelling.
This arrangement offers several potential advantages, including a lower initial financial barrier compared to traditional homeownership. It can provide an accessible pathway to building equity and property ownership for individuals with limited savings or imperfect credit. Historically, similar leasing arrangements have been employed for various types of real estate, providing an alternative to conventional mortgage financing, particularly during periods of economic uncertainty or limited credit availability.