Market conditions pose a real risk to any homeowner, but they can go either way and also be a huge benefit to homeowners. Another question you should have the answer to is “what happens when the market appreciates more than expected?”
The very simple answer to this question is – the client wins!
Most rent to own programs lock in the purchase price upfront, so any additional appreciation goes straight to the client. This is a great benefit for the client and means that they can either keep their additional equity in the deal (and enjoy lower mortgage payments), or they can take a higher mortgage to free up some cash.
You might also ask “wouldn’t the investor be upset if the home appreciates more than expected?” The truth here is that some investors would probably kick themselves on all the extra profit they missed out on, but most will simply be happy that everything worked as planned. The investors were able to help a client achieve home ownership while enjoying monthly cash flow and a great return on their relatively passive investment. So really, why should they be upset?
All in all, if the market appreciates more than expected, everyone wins and the client completes the deal in an even better situation than they originally expected.