Rent to Sell
The residential real-estate market in metro Detroit and Michigan can be summed up fairly quickly: It’s a great time to buy, a tough time to sell. So how did Michael Kalis, managing partner of Plymouth-based Marketplace Homes, sell 100 new homes last year?
The company became a landlord. Under the program, Marketplace will extend a two-year lease, renewable for up to six years, at rates ranging from $800 to $1,500 a month. The company takes care of collecting the rent, maintenance, and upkeep, even if can’t find a tenant.
“If you don’t solve someone’s problems, you’re not going to sell homes, whether [they’re] new or used,” says Kalis, a former sales representative for Pulte Homes Inc. in Bloomfield Hills. Priming sales for Kalis is a $6,500 federal tax credit for existing homeowners who buy a new home (with some restrictions). First-time buyers may qualify for an $8,000 tax credit. The incentive is scheduled to sunset in June.
Jeff Drummond, a medical sales representative, says he and his wife, Emily, turned to Marketplace for a new home after having their first child in the summer of 2008. “I had a two-bedroom condo in Waterford Township, and we just needed more room,” Drummond says. “So Marketplace helped us build a three-bedroom Cape Cod in South Lyon, and now we have another baby on the way. The program has been working, which is a relief, given the state of the housing market.”
Offering access to hundreds of lots in 40 different communities in the region, including Lombardo Homes in Washington Township, Marketplace requires that a buyer select a model from one of its partner builders. Kalis says new home prices range from $140,000 to $400,000. The company makes money from real-estate commissions, as well as from rentals (assuming a profit is realized on the lease).