People

The New Rent to Own

May 29, 2020

Searching for your first home, while living in a great rental, can be a major challenge.  You spend your weekends looking at homes that offer so much less than what you already have.  You find a home for sale and think, “We’ll remodel the bathrooms,” then return home to your rental with beautifully updated baths.  You find a home with an outdated kitchen and say, “We can just change the countertops, paint the cabinets, get new appliances,” then realize you already have a very comfortable, completely remodeled kitchen setup where you already enjoy cooking and preparing meals.  These are a few of the difficulties many first-time buyers face when hitting the pavement in search of being a homeowner.

After seeing many homes together, reviewing the pros and cons of each house in comparison to their current rental, it became clear, this couple was super comfortable right where they were…and they may not have to leave after all.  A few years prior, when they began renting, their landlord mentioned selling to them, so why not now? The market being strong, the owner would likely enjoy a nice profit and the couple could ultimately get what they wanted.

Even though their landlord had mentioned selling years before, there was no guarantee he would sell now.  After preparing a small presentation for their landlord- including comparable sales, inventory and pricing in the area, we approached the owner with contract.  After a bit of back and forth the owner agreed to sell and the couple opened escrow quickly.

Paul and Natalie rented their home in FQ Story for three years before purchasing, the story of how they met, how they moved and ultimately how they bought their home inspired us to share in the hopes it might help other first timers facing this scenario.  After the couple closed on their home, we spent an overcast morning chatting about their plans for the house and the future.

N: Where are you from?

P: Natalie was born and raised in Phoenix. She was born at St. Joseph’s, so she hasn’t gotten too far. I was born in Washington state, but moved here at a young enough age that I consider myself an Arizona native. We both grew up in the East Valley, in Tempe and Gilbert.

N: What brought you to Phoenix/Downtown Phoenix?

Nat: I fell in love with downtown Phoenix back in 2009. I was going to ASU at the time and met up with a friend at Hobb Nobbs (now Luana’s) to study. I instantly LOVED the cute coffee shop and the quaint historic neighborhood right next to it! I told myself that if I ended up staying in Arizona after I was done with school that I would have to live downtown. Fast forward to 2017 (after being in school for basically forever), Paul and I were living with my parents, but ended up stumbling upon the most adorable and perfect rental downtown and moved here 3 weeks later!

N: How did you meet?

P: Natalie and I met Freshman year of high school. We were only 13 and she was taller than me at the time! She was never that into me (justifiably), but after a lot of persistence on my part we ended up dating by the end of high school and became college sweethearts. We did long distance for a few years while she was in Tucson and I was in Flagstaff, but we moved back to Tempe so that we could go to ASU together.

N: How long have you lived in the house together?

P: We’ve been in this house for about three years now. Not only was this our first home, but it was also the first place we lived together (after 10 years of dating!), so it is quite special to us. It was kind of crazy how we started renting here – we saw that it was for rent and tried to get in, only to find that someone beat us to it. So we went with a condo that we weren’t as fond of. The day that we were going to sign that lease, the Lynwood house showed back up again. I immediately called the agent, and found out that the original renter paid the security deposit and then backed out last minute. We were able to get the first showing, despite 5 others also scheduled to see it! We checked it out, immediately fell in love with the house and the neighborhood, and signed a lease here instead of the condo.

N: Can you share what you do you do for a living?

P: I am an electrical engineer at Texas Instruments, where I do analog circuit design. That sounds really boring, but I think it’s super cool!

Nat: I am a pediatric occupational therapist. I work in rehab with children who have physical, developmental, cognitive, and feeding challenges. Most of the work I do is in home, which is a lot of fun, minus the driving around during the summer heat!

N: When and where were you married?

P: We made the bold choice to have our wedding in Rocky Point, Mexico, which took place in April 2018. We did most of the wedding planning on our own, which was quite a bit of work, but also a lot of fun. And all that planning took place in this house, which is just another reason that it is so special to us.

N: What made you want to buy vs rent?

P: Right after school we were hesitant to buy, due to the mountain of student loans we needed to pay off. Acquiring more debt didn’t seem like the wisest move at the time. But as time wore on, our loans were getting paid off, and we realized that we wanted to stay in Arizona long term, it started to make more sense. Not only that, but we wanted to stay in downtown Phoenix, and didn’t want to wait too long and be priced out of the market. We figured that if we bought a house down here, regardless of what the market did we were along for the ride and could stay in the area.

N: What did you do to prepare for buying? Saving, etc?

Nat: We spent a lot of time looking at houses online, going to random open houses, and spending time researching the steps involved with buying a house. However, we learned a lot more about it all when working with our realtor than we ever did on our own! From a financial perspective, our student loan balance was to the point where we felt comfortable ramping down our payments there to shift them towards the house.

N: Was there anything that shocked you about the process of buying?

P: I think what shocked us the most was not how hard it was, but rather how easy. It’s a pretty big financial commitment, and yet with nothing more than approval from a lender you can make an offer on a house!

N: What made you ultimately decide to purchase your rental home?

P: It’s interesting because we used to say that if we ever bought a house it wouldn’t be our rental. We would look around at other houses in our neighborhood and had a  “grass is always greener” mentality. We spent a lot of time looking at houses, and there was always something that didn’t work with each of them. But as we started paying closer attention to our criteria and what we did/didn’t like about different houses, we started to realize that we were really just looking for our Lynwood house. What made us truly understand this was when we were putting an offer on a house two streets down in FQ Story, and we were talking about how great it would be since we could still walk over to our neighbors’ houses – if we care so much about being close to our neighbors then why would we move farther away from them??

N: How did you approach your landlord?

Nat: This was actually quite effortless. When we first started renting, our landlord had mentioned that he would be willing to sell the house to us if we were interested in it. Maybe this had something to do with us initially not wanting to buy it – too easy right?

N: Do you feel the transaction was better or worse with someone you already knew?

P: I would say that it was both better and worse. Our relationship with our landlord was mostly professional, but we did communicate more with him than I think most tenants do. It was easier in the sense that it is always more comfortable working with someone you know, not to mention the fact that we weren’t competing against other buyers! It was harder in the sense that when things didn’t go quite as planned, which happened more than we anticipated, emotions definitely ran higher.

N: Was there anything comforting or special about buying a house you already lived in?

Nat: Absolutely! So many things… We didn’t have to pack up and move all our stuff, yay big plus!  We LOVE our neighbors and are close friends with many of them so we were thrilled that we would still be right next door.  We love FQ Story – it’s such a wonderful and welcoming neighborhood.  We were already familiar with the house (and its weird quirks) having lived in it for almost 3 years so it made us feel extra comfortable with our decision.

N: What are some of the projects you have done so far? What’s next on the list?

P: The first project we undertook was removing the huge tree within a foot of our house that was threatening our foundation. We felt really bad taking it down as it was a beautiful tree, but it just wasn’t worth the risk to keep it. With a little prodding from our chainsaw-wielding neighbor and a desire to save a few bucks, we decided to throw caution to the wind and down came the 40 foot tree. Things didn’t go quite as planned and there was some collateral damage to a bush (RIP), but no one was hurt, and we now have a great seating area out front that we have always wanted! Our next minor project is to add a glass storm door to the front to help us bring more light into our living room. Our next major project is to replace our single pane windows, something that is much needed, but also quite expensive!

N: Do you see yourselves staying for a while in this home?

Nat: We plan on staying here as long as our family is small enough that we can all comfortably live in the house. Our dream would be to eventually build an extension to the house including the addition of a third bedroom!

(Above: couples picture after taking out the tree and adding a seating area)

N: What is it like living in FQ?

Nat: It is awesome! There are a lot of historic neighborhoods in downtown, but we didn’t realize that we stumbled into the one that happens to be our favorite (I mean, we’re not biased of course…). There are so many amazing houses, and no matter how many times you walk through the neighborhood you always end up seeing one that you hadn’t noticed before. We love how quiet the neighborhood is, except for our beloved freeway of course! The saying in the neighborhood is that the sound of living next to the I-10  is similar to living by the ocean. But at the end of the day the most important thing is not the neighborhood but the neighbors – and we are very lucky to be close friends with almost all of the neighbors on our block!

N: What are your favorite local spots?

Nat: This is so hard to make a short list as we have so many. One of the things that we love about FQ is that we can ride our bikes or walk to so many places! Some of our favorites are El Charro Hipster Bar and Cafe (great food, cocktails, coffee, and super cute), Sidebar (when we’re feeling swanky), Bikini Lounge (when we’re feeling not so swanky), and Grand Avenue Brewing Company, which are all within walking distance.

The new rent-to-own might look a little something like this in the future.  If you’re wondering how to approach your landlord about potentially purchasing the home, townhome or condo you currently rent, reach out to your trusted agent for a price opinion and to ask how the process might work for you.

We are so happy for Paul and Natalie to have purchased their lovely home, congratulations!!

 

 

 

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