New Home Builder Guarantees 3 Years Rent on First Home

Real estate agents call it a “buyer’s market” – if you’re looking to buy a home, prices are down and interest rates are low.

But if you have to sell your home first, these low prices and a market still glutted with foreclosures can work against you. That leaves many potential buyers stuck in houses they can’t get sell. Those are the people, Pete Altuchow, the sales director at Pardee Homes, hopes to attract.

“We found this was an opportunity to continue to grow our market,” Altuchow said of Pardee’s new new program, Smart Move Advantage. Once potential buyers are approved for a loan on a second home, a professional management company helps them find a tenant for their first, taking over charge of utilities and maintenance for up to three years. The buyer keeps the rent.

“It allows you to be a buyer today and it allows you to be a landlord in a very strong renter’s market,” Altuchow said.

In Palm Desert, Greg Burkemer, executive vice president of the California Desert Association of Realtors, says the program allows people who are ready to move sell their homes when the price is right.

“It gives me the latitude as the owner of my current home to make a decision on my time, rather than having to get out of this house to get into another one,” Burkemer said. He added that homeowners may want to use the three years to see if the housing market continues to recover, increasing the value of their home.

The program isn’t for everyone. The income from renting out the first home cannot go toward qualifying for a loan on the second, even though the income is guaranteed. That can make it tough for potential buys to qualify.

After less than three weeks, six families are applying to become landlords and homeowners in the Beaumont neighborhood, according to Altuchow.