Something we can all agree on is that in some places, buying a home is just out of reach for many people. There are a variety of reasons for this, usually bad credit or just not enough cash for a down payment. Masses of people being unable to afford housing just didn’t sit right with real estate developer Bruce McNeilage, a Spring Hill native and president of Harpeth Development, LLC based in Nashville, TN and co-founder of Kinloch Partners, LLC.
The Tennessean real estate expert decided to begin his adventure into affordable housing for people in Atlanta by getting involved in “Build-to-Rent” housing projects around the city in late 2013. Build-to-Rent properties are single-family homes that are built to normal standards and are intended to be leased out to tenants upon completion. The intent with these types of homes is to give tenants the suburban experience while renting, and give them the opportunity to improve their credit and financial situations to hopefully work towards a purchase (becoming a Rent-to-Own situation).
The New York Times reports that “Building homes to lease, rather than sell, has begun to make sense to home builders and investors because the pool of qualified first-time home buyers has shrunk even as the price of buying existing homes has risen enough to make new construction worthwhile again.” People who may have families, but are struggling too much financially to qualify for a loan can find comfort in being able to provide a nice home for their family members while the renter can repair their finances to possibly buy the home one day.
McNeilage continued his low-cost housing crusade in Atlanta by developing over 50 single-family homes complete with multiple bedrooms and bathrooms with additional granite countertops and top-of-the-line stainless steel appliances. Through 699homes.com, McNeilage proposed selling homes to people for $699 a month who could qualify for a FHA loan and give a down payment of 3.5%.
The caveat to this who deal is that Kinloch Partners LLC will provide a Rent-to-Own option for buyers who don’t qualify for the FHA loan; the real estate company will be leasing homes at $1200 a month to allow tenants to accumulate the credit and finances needed to buy at a later time. The Tennessean reports “‘That he’s willing to do rent-to-own on a brand-new house, that’s innovative,’ said Scott Ractliffe, a senior vice president and mortgage adviser at Nashville’s Pinnacle Financial Partners.”
McNeilage continued to make waves when he wanted to build low-cost condominiums on Litton Avenue in Nashville and only charge $119,900-$160,000 per unit. According to the NashvillePost, McNeilage said this about affordable housing: “Nashville is so hot that the common man and woman are being pushed out of the city and have no place to go. Where does the teacher, the nurse, the single mom with kids, the young person out of college live that is a nice decent place and near downtown? My goal is to develop a successful project on Litton so that other developers will want to do such a project.”
The real estate expert has also renovated Jefferson Manor, Belmont Village, and Charlotte Manor in Nashville and plans to create most affordable housing unit buildings around the city. “I have developed a reputation for taking some chances,” McNeilage continued in his interview with the Nashville Post. “With this vision will come more affordable housing in the urban core. This is not a glamorous thing I do, but it’s needed.”
McNeilage took a bold step forward last month at the Single Family Rental Forum in Scottsdale, AZ by stating that he believes Rent-to-Own homes are not only the key to getting Millennials to buy, but to also improve the economic well-being of the housing market as a whole according to a press release. The PR piece reports that “buyers in the so-called Millennial generation are strapped with student debt, face an uncertain economy overall and are not getting married and starting families as early in life as their parents,” McNeilage said. “This is creating an entire generation of renters. For most people, their home is their single biggest asset. What happens in 20 or 30 years if this group of consumers doesn’t buy? Individually, they will not build wealth and as a nation, our real estate values overall will drop. It’s important that as an industry we look for ways to get younger buyers into homes.”
One of the main reasons why Millennials keep putting off buying a home is student debt, which, according to the Federal Reserve Bank of St. Louis, has tripled since 1989. McNeilage strongly advocates giving younger people a chance to rent a home they are interested in for a time in order to compose the proper financial situation to buy and ultimately love the property enough to make a purchase.
McNeilage wants to turn the low buying rate among Millennials around by letting them transition into the purchase rather than buying outright since the process itself can be very daunting, especially to a generation that is so saddled with debt. He believes that working with Millennials into a comfort zone where they begin to feel confident again about buying homes is paramount to also kickstarting the housing industry. It would seem that the “Try Before You Buy” concept is not so limited.
Even with housing prices starting to rise, McNeilage recognizes the immediate need in America for affordable housing since debt in addition to wage stagnation is still an issue for many people. He also believes the Rent-to-Own system of home buying is a great way to get many people who may believe buying is out of reach, coincidentally enough since the amount of doubters has grown substantially. Keep on eye on Harpeth Development, LLC and Kinloch Partners, LLC because they may be bringing nice yet affordable housing to a neighborhood near you with Bruce McNeilage at the helm.