I ran across an ad for rental property in a Front Royal paper this past week.

The ad states:

"Rent to Own - Problem Credit OK - Earn Rent Credits"

Then it asks "Why should you rent to own?"

And it answers:

• It's fast and easy (move in days)
• You don't need a 20% down payment
• No bank qualifying
• You don't need good credit
• No fees, commissions or closing costs
• Earn Equity faster than purchasing

Some of these points are clearly true. Renting is faster than buying, generally. A bank is generally not involved is another true statement. And, no one asks for 20% of the purchase price up front for a rental. (But how many people put 20% down on a home these days?!)

The "don't need good credit" is disturbing. If you're a seller and can't sell so decide to go the rent to own route, you're setting yourself up for serious problems down the road if you don't care about the renters credit. And, if there is a credit check and people with low credit scores are turned away this is very misleading.

"No fees, commissions or closing costs" is another misleading item. There may not be the closing costs associated with purchasing a home, but there is almost certainly a deposit. And some of the rental deposits can be very large, up to three months' rent.

The last one is laughable. "Earn Equity faster than purchasing" the ad says. With a rent to own situation typically some of your rent each month is going towards an eventual down payment. The ad says up to $400 in this instance. But depending on the house and the situation there's no automatic guarantee that you're earning equity faster. There are people getting great deals on short sales and foreclosures where they are getting thousands of dollars in immediate equity. And, each month when they make their mortgage payment their equity is increasing as well.

Of course, there are also plenty of people in this market whose equity is decreasing right now.

But the point is that whoever wrote the ad can't possibly guarantee anything with regards to equity.

If you're looking for a rent to own situation, be careful of ads like this. The actual property for rent may be a great one. The deal may be terrific. But you should be on full alert given the lack of honesty in the ad!