A Detroit firm has come to Indianapolis with a new twist on the "move-up" incentive for new houses.
Marketplace Homes LLC is advertising its services in conjunction with national builders Drees Homes and Westport Homes Inc. Instead of offering to help would-be buyers of new houses sell their old homes, Marketplace is offering to become a rental property manager. The company says it will even guarantee lease payments from the old house for as long as six years.
However, there's no guarantee that those payments will cover the new mortgage payment. Or that home buyers will be able to finance a second mortgage.
"That's where it gets tricky. You do have to qualify for the second mortgage," Marketplace Homes marketing assistant Elyse Sarnecky said.
Marketplace makes its money on commissons paid by the builders. The company sends a "solutions manager" to the existing home to determine its rental value. Marketplace will then guarantee a certain stream of income, whether it successfully rents out the home or not. Sarnecky said the longest a house has gone unrented is about three months.
"The rental market is really strong right now," said Lisa Andrews, a co-owner at Carmel-based Silver Property Management Inc., a residential rental property manager.
Foreclosures have pushed quality renters into the market, but the crisis has also created a lot of rental inventory, Andrews said. As a result, rental rates are staying low. Andrews said she encourages single-property owners to see the rental income as a way to mitigate their losses, rather than cover a mortgage.
Andrews said she's not concerned about potential competition from the Marketplace Homes program because they're targeting traditional homeowners, not investors.
Marketplace's "buy now, sell later" program seems to have worked well in the depressed housing market of Detroit, and now it's expanding to multiple cities. Marketplace, which is privately held, says its program accounted for 200 sales of new homes in metro Detroit last year.
Marketplace says it has helped sell two new homes in the Indianapolis area in the past two months, one by Drees in Somerset in Fishers and one by Westport in Bay Creek East in McCordsville.