Curbing Abandoned Properties and Cleaning Up Empty Neighborhoods: Renting To Own May Be The Solution

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Fed Chairman Ben Bernanke is one of the many supporters of rent to own home deals for both individual sellers as well as banks with abandoned foreclosed properties. Martin Orefice, the founder of expects rent to own programs to help improve communities hit hardest by the foreclosure crisis.

Rent to Own Homes
With the proliferation of foreclosures, buyers need alternatives to traditional financing and dealing with the banks.

In a recent speech to the National Association of Home Builders, Chairman of the Federal Reserve Ben Bernanke discussed the negative consequences of leaving foreclosed homes abandoned, including vandalism and weathering, which costs money in repairs and lowers the value of neighboring homes. Bernanke also commented on the increase of renters and the shortage of rental homes. Though the economy has been improving and 243,000 jobs were successfully added in January, employment uncertainty is causing many would be home buyers to continue renting.

Because of this, renting to own is a viable option which allows people to buy houses in increments while renting. This keeps homes occupied, lowering the cost of upkeep on abandoned homes and maintaining property value within the neighborhood. Because renting to own can both increase housing sales and decrease costs of upkeep, Bernanke suggests a portion of commercial banks' real estate owned properties, an estimated value of $11 billion worth of homes, be rented out in lease option deals.

Martin Orefice, founder of the rent to own website, agrees that renting to own is a solution to real estate stagnation, explaining in an interview, “A rent to own scenario gives the buyer the opportunity to buy while providing time to clean up their credit and decide if the neighborhood is right for them. With the proliferation of foreclosures, buyers need alternatives to traditional financing and dealing with the banks.”

Orefice has been working in the real estate industry for eight years, selling multiple properties through rent to own agreements and seeing the benefits for the buyers, sellers, and neighborhoods. Martin explains his inspiration for starting the site, “I saw the banks tightening up lending requirements and recognized the need for non-traditional financing. Additionally, there was no single search engine for rent to own properties. I wanted to fill the void in the market and create an online marketplace where buyers could go to one place and connect with sellers directly without the interference of third parties.”

While banks have yet to respond to Bernanke's proposition of using lease option contracts to help fill empty bank-owned properties, rent to own deals are becoming more popular with American buyers and sellers. Take it from Martin, whose website has already seen a 4-fold increase in visitors over the past year. With the US government and institutional investors getting involved, Orefice expects rent to own programs to continue increasing in popularity while simultaneously helping improve communities hit hard by the foreclosure crisis.

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