To everyone that wants to purchase a new home in the future. (Arlington: real estate, apartments)

[iron_guitarist1987]

Hi all,

I just thought I would share this information with everyone.

If you currently renting, and feel you're just throwing your money down the toilet, then you should definitively read this. There are actually two companies (that I know of) that have a "renter's rewards" program. This first one is called Bozzuto. They own some renting communities in Fairfax, Falls Church, Manassas, Arlington, Alexandria, Herndon, and many other places. Their program is called SmartRent, where each month they set aside $350 from your rent towards the closing costs of a new home. They currently only have homes in DC and in MD, but I remember them telling me a year back that they were planning on expanding. Integrated Real Estate Services - The Bozzuto Group

The second company is Van Metre. The have less renting communities in NoVa, but have some homes here, mainly in Ashburn. Some of the renting communities are located in Fairfax, Springfield, Ashburn, Herndon, DC, and a few other places. They offer a Renters Rewards program, where 100% of your rent can go towards the purchase of a new home, up to 3% of the cost of the home. Most of their homes are in between Ashburn and Stone Ridge, VA. http://www.vanmetreapartments.com/

Both of these companies require that you strictly purchase one of their homes, and they do have some rules. Make sure you contact them and get more accurate information. Even though it not may seem like much, but is a nice option that you can consider when saving up for a new home.

Hope this information helps someone!

PS: I do not work for any of these companies, neither am I a share holder or anything. I'm just a a Virginia resident who thinks these programs are nice!
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[NovaZombieDrivers]

Has anyone ever participated in one of these programs who can provide some feedback?

I'm guessing they make money by forcing you to go with their their own financing.

[boyd888]

The catch is that you have to buy one of their homes. You get a very tiny discount or upgrades for agreeing to be locked in to buying ONLY one of their homes, either of which could easily be negotiated without having to rented in one of their properties for years. It won't help anyone who couldn't have afforded a different home anyway.

It really is just a way for them to jump on the "renting is throwing money away" myth that continues to perpetuate for some reason. Rent with us, not all of your money is thrown away (if you buy one of our homes that is)! I wonder how many people they convince to rent with them with the promise that it will help them buy a home someday. It is a great program for their customer retention department as well. Someone who is no longer going to be renting means you won't be making any more money off of them, but if you can give them a little bread crumb discount to get them to buy one of your homes....

[NovaZombieDrivers]

It seems like a marketing ploy. One could rent a cheaper property and save the 350/month on their own and maintain the freedom to purchase anywhere you please. Once you sign anything, you lose all negotiating leverage.

[mshan242709]

Know nothing about the specific programs OP is referring to, but quick glance makes me think "rent to own".

Google search -> Is rent-to-own a scam? - MSN Real Estate

Even if program is honest, I would guess that you are essentially paying subprime type interest rates (i. e. very high) because of possibility that rent to own home buyer just might not qualify for a regular mortgage at more competitive rates (seller is basically financing the "mortgage", so to speak, with no collateral other than house seller is selling to rent to own buyer).

[CAVA1990]

Perhaps these are some of the speculators who are bidding up prices and paying cash?

[jillybean720]

I had a coworker who bought into this idea once. She and I lived just a couple miles from one another in Alexandria inside the beltway, and my apartment was larger than hers (2 bedrooms plus den versus her one bedroom), my apartment had a normal washer and dryer in unit while hers had one of those washer/dryer in one combo things, my apartment had a balcony whereas hers did not...I was "throwing away my money" to the tune of about $1300/month, while she was obviously smarter than me and paid MORE than me, but part of it would go toward her purchasing home in the future. I'll take the lower rent and put the difference aside myself, thanks, instead of being cornered into higher monthly payments for less apartment for the "privilege" of having some money set aside to purchase from a small selection of potential future homes.

[NC211]

Originally Posted by NovaZombieDrivers

It seems like a marketing ploy. One could rent a cheaper property and save the 350/month on their own and maintain the freedom to purchase anywhere you please. Once you sign anything, you lose all negotiating leverage.

Exactly. Trust me, there are no freebies in CRE development in this town. None. Plus, it would be nearly impossible for these developers to get the kind of financing they require on these rental projects, if the perceived income stream could be called back to the renter for a piece of collateral that is not a part of the loan. Example: Builder A has apartment build A, with 300 units. If every tenant signs up for this program, than right off the bat, a lender would take that amount off of the project's rental stream. There is no way this would work. If the renter does indeed sign up for this, and goes the distance to buy a home from them later on, I am almost positive that amount of money would be recaptured in either the interest rate of the financing package the renter would be required to use to finance the acquisition, or in the price of the home, or both. Not in upgrades. They'll want to recapture that amount asap once the clause is triggered, and they will.

Builders offer all kinds of incentives to get people to buy their homes, especially if you use their financing department. For instance - paying for closing costs. Some of those incentives can exceed $20,000. You sign up for one of these programs, and you've given then leverage against you. Scare tactics of "well, you don't want to risk losing all of that equity you've already built up with us, do you?".

It's the same tactic employers in the finance sector sometimes us. Get your mortgage with us, and we'll knock 1.5% off of your rate, as long as you're an employee. Funny....those who do this, usually aren't the happiest employees overall. Care to guess why? Worst case I've ever seen of this was in NC with a credit union. 1.5% off the rate = cheap bonuses and reduced promotion potential, and when the employee complained, the little HR battleax would play this card upfront "well, you're not forced to work here, but remember, you're mortgage payment will increase if you leave". Here's the catch, it was all a scam! Here's why: It wasn't 1.5% off of the actual interest rate, it was an additional 1.5% of the payment being applied to the principal of the loan! Follow me? No? Look at it like this: Interest rate 5%, mortgage term of 30 years. Employee thinks they're paying an interest rate of 3.5% for 30 years. When in fact, the employee was actually paying the 5% rate, but the term was being shorten to say, 28 years. Total scam that ultimately ended up huring the employee far more than it helped.

When it comes to big ticket purchases, being in the driver's seat of actual perceived interest in the item you're wanting to buy, is the only key to getting a good deal. Take this bait, and you'll forfeit that leverage immediately. You'd be better off negotiating cheaper rent, than this. Plus, what kind of interest does your "deposit" pay you that you're placing in the hands of your landlord? Care to ask the landlord what interest rate they're making off of your money? Albeit, in this environment, not much...

The upside to this though, is seniority of service. The two names you mention are truly top-shelf players in the area, without question. I know for a fact, they are loyal to those who are loyal to them, and if you go down this road and have a problem with one of their products, I have absolutely no doubt in my mind that you'll get the red-carpet service to correct the mistake. You probabaly won't be dealing with some 1-800# for warranty claims of construction defect, like many of us have to do.

[boyd888]

Originally Posted by mshan242700

Know nothing about the specific programs OP is referring to, but quick glance makes me think "rent to own".

Google search -> Is rent-to-own a scam? - MSN Real Estate

The stuff mentioned in the OP is not "rent to own." It is "rent an apartment with us and we'll give you a discount if you build a home with our builder."

Rent to own would be like someone renting a SFH in Fairfax with some of the rent money going towards a down payment (or whatever the terms) to buy that exact home at a later date.

[metamorphosis]

I lived in such an apartment community. They ended up selling to another community, so the "points" (not money) were gone when they sold.

When I inquired about the program, I was told that they didn't actually set aside money toward a house, it was more of a points system that they had going with the particular builder.

Housing prices are soooo expensive there that any discount that you might get is still going to yield a purchase price that is outrageous. So, if your home is going to cost $400K, they might take $10K off - maybe more, maybe less.

Like a lot of marketing ploys, they can change or recind them at any time and/or either company (apartment or builder) can be sold or go out of business at any time, which would be the offer worth nothing.