Jill Vegas, New York City Home Staging
Rent Now, Buy Later
By VIVIAN MARINO
Published: December 5, 2008
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“Even though I have excellent credit in the U.K., it makes no difference in the U.S.,” Mr. Hall said, adding that “eventually I will have rental history and utility bill history. ”
Over the summer, before the birth of their daughter, India, the couple signed a one-year lease option on a 1,200-square-foot two-bedroom at the BridgeView Tower Condominiums near Dumbo, Brooklyn. If they agree to buy before the lease expires, he said, their $4,000 monthly rent (minus maintenance costs) will go toward the purchase of the unit, which has a current asking price of around $980,000.
Michael D. Mancuso, 29, a salesman, and Danielle J. Gendler, 26, an events and marketing manager, were not necessarily concerned about their creditworthiness, but they wanted extra time to save up for a larger down payment. In October, they signed a similar lease-purchase agreement for two years on a one-bedroom at BridgeView Tower.
“If we get most of the rent that we paid back, I’m pretty much living in Brooklyn for the next two years for nothing,” Mr. Mancuso said. By his calculations, 83 percent of the $3,000 in monthly rent will go toward the purchase, which means the $550,000 apartment will cost them around $490,000.
“It buys a little time for everyone,” said Scott Domansky, a principal of PRD Realty, the developer of the Heritage at Park Slope in Brooklyn, a 21-unit condominium, which last month began offering rent-to-own options on six unsold units. (So far no takers, he says, though he is in negotiations with interested parties.)
“I didn’t think this would be an option a year ago,” Mr. Domansky said. “The market was still strong — apartments were selling at such a rapid rate that I thought I would be sold out. But I’m happy to have renters and monthly income in lieu of a sale.”
Jason Murdock, a 33-year-old part-time disc jockey and technology consultant, is hoping that will happen for him. During the height of the real estate market, he bought several investment properties — including two in Jamaica, Queens — and now needs to sell them. He already lost one home, in Atlanta, to foreclosure, he said.
“I’ve had interest from people who wanted to purchase, but they couldn’t get a mortgage,” said Mr. Murdock, who recently moved to Charlotte, N.C., from Freeport on Long Island, and still needs to sell his house there as well. Allowing would-be buyers to lease first and use an as-yet-undetermined amount of rent toward the purchase “gives the buyers time to save up,” he said. It also shows him that they are qualified to buy eventually.
Brokers are even executing lease-purchase agreements in co-op buildings, though mostly, they say, as a last resort. (Most co-ops, however, restrict rentals.)
