Rent To Own Attracts Tenants

Managers of some Albuquerque apartment complexes have started programs to help their residents save money toward the purchase of a new home.

Ironically, they hope the new incentives will help boost occupancy in their rental properties by keeping tenants there longer.

The A1buquerque apartment market is currently the softest it has been in 10 years with an average occupancy rate of 88A percent.

Record-low interest rates and a plethora of funding mechanisms for first-time, lower-income home buyers have siphoned off people who otherwise would be renting apartments.

Another factor has been manufactured-housing, which continues to thrive as an inexpensive alternative for renters.

"Most folks live month to month; they haven't had a source for a down payment," said Todd Clarke, a broker and apartment specialist for Grubb & Ellis/Lewinger Hamilton.

New programs aim to help people save a down payment or money associated with buying a home, like closing costs or upgrades.

Home Ownership Made Easy, or HOME is one such program. BRE Properties of Phoenix, started it here during the summer of 1998.

BRE Properties manages the Pinnacle at High Desert, Pinnacle Estates and Pinnacle View. All are in Albuquerque. A fourth complex, Pinnacle al High Resort, is in Rio Rancho.

Residents of these complexes can have 20 percent of their monthly rent directed toward the purchase of a new home. Between $2,000 and $4,000 depending on the price of the home can be accrued through the program. "It's a great marketing tool; it gets people in our doors," said

Tyler Kernmer, BRE Properties' HOME director.

Two Albuquerque home sales, currently pending, have been made through the program, Kemmer said

Participating home builders are Centex Homes, Kaufman & Broad, Raylee Homes and Richard Fuller Homes.

"Our program was first introduced in Phoenix and Salt Lake City in May of 1997. To date, we have made 85 home sales," Kemmer said

This month another Albuquerque apartment manager started a similar program to help its residents with home buying.

"We are rebating up to 20 percent of each month's rent back to our residents to be used toward the purchase of a new home here in Albuquerque," said Emest Cohen, a managing partner for American Realcorp.

American Realcorp manages the Cottonwood Ranch and Taylor Ranch Apartments. Its program is called The Future Homebuyers "Residents who pay, say $750 a month in rent, could be putting as much as $150 toward the purchase of their home," Cohen said.

Rental rates at the Cottonwood Ranch and Taylor Ranch Apartments range from $575 for one bedrooms, to $875 for three-bedrooms, he said.

Cohen's goal is to have 100 residents signed up for the program within 90 days, he said.

Home builders are just as excited about the new incentives as apartment managers.

"New Mexico has really good programs for home buyers but they still need the down-payment money," said George Daunis, director of marketing for Raylee Homes in Rio Rancho.

Raylee is also participating in the BRE Properties program.

Apartment complexes are not the only type of rental properties introducing home buyer incentives. At least one condominium community has started a "rent-to-own" program. New owners of the Village at Four Hills (formerly the Deer Meadows Apartments) at 13128-A Wenonah Ave. S.E., are not only matching, but doubling the amount of money its-residents invest each month on top of their rent toward the purchase of a unit

The 64-unit apartment complex currently is under redevelopment to become a condominium community.

The two-bedroom units will start at $67,500.

"If a resident leases a unit for $500 and they can afford an additional $50 per month, the owner will match these funds at $100 per month," said Karen Caprarella, senior residential portfolio manager for Grubb & Ellis/Lewinger I Hamilton.

"Over a 24-month period their down payment will have increased to $3,600," Caprarella said.

The program is the concept of Steve Peters, of Santa Fe, the lead investor in the Village at Four Hills, said Clarke, the apartment specialist for Grubb & Ellis.

Clarke and fellow broker Joe Azar III represented the seller and purchaser in the recent sale of Village at Four Hills. He said the program will allow tenants to "leverage into ownership with minimal hassle and down payment."

More details on the Village at Four Hills can be found at http://www.nmcomreal.com/nmcomreal or by calling the listing agents, Todd Clarke CCIM or Tanya Kauffman at Grubb & Ellis|Lewinger Hamilton Inc. 505-883-7676.