The only version of "domain rental" that I've seen work are those involving big ticket domains, iron clad lease (rent to own, lease purchase) agreements where the domain is (most likely) held by a third-party escrow (lawyer?) who will deliver the domain upon on the final payment terms being satisfied.
Building value on a rented domain isn't a model that has gained acceptance. Builders don't like the idea of creating something they can lose control over. Domain holders, for domains of any significant value, don't care to risk having a domain "trashed" by spammy tactics, blackhat, etc.
bwnbwn pretty well summarizes the "market sentiment".
OBTW, welcome to WebmasterWorld wwavatar. Good first question. Hopefully not too painful a lesson.