Why You Might Lease, Instead of Buy, Your Next Home

'Buying a home is the best investment you’ll ever make' has been the conventional wisdom for generations, especially for Boomers, who consider home ownership not just a right of passage but a secure foundation for retirement. All that’s changing as escalating home prices, uncertainty in the real estate and financial markets, and cash-strapped Millennials have made potential buyers second-guess the advantages of home ownership. At the same time, for-lease homes are trending in private communities as they dedicate more real estate for rental while offering them the same sought-after amenities they do to buyers.

In Florida, there’s a growing demand for rental homes

Whether it’s seniors looking for a retirement home, families looking to get their kids in a preferred school system, try-before-buy seekers, corporations looking for employee housing, or people rebuilding from storm damage, the demand is growing for rental homes in Florida’s master-planned communities.

At Stillwell, a new gated rental neighborhood breaking ground in Coastal Ridge’s Wellen Park in Venice, FL, 274 single-family homes built for rent complement the masterplanned community. “The rental neighborhood helps make a true community, one that’s not so homogenized,” said Rick Severance, president of Wellen Park. “These types of offerings add value to the community.”

The rental neighborhood will offer one-, two-, and three-bedroom homes, ranging from 712 to 1,275 square feet with a private backyard and patio. Residents will also enjoy an active lifestyle at Stillwell that focuses on health, wellness, and community with a clubhouse, resort-inspired zero-entry pool, fitness center, and indoor and outdoor recreational amenities. Leasing will begin in late 2022, with the first homes expected to be completed by early 2023.

Worry-free, lease-only living comes to the Midwest

An up-and-coming, small rural town in the southeast corner of Kansas is now home to a new 55+ residential-for-lease community: The Villas at Creekside. “Pittsburg, KS, is a town on the move, and we wanted to be part of something great,” says the developer, Dexter Pearson. “At first, we were going to sell the units, but then we decided to make it a leaseonly, maintenance-free community where people don’t even have to change their own light bulbs. We wanted to make this community as worry-free for people as possible.”

The Villas at Creekside’s monthly leases are $1890 for a two-bedroom/two-bath and $2100 for a three-bedroom/two-bath. All homes have oversized two-car garages and a front porch for chatting with neighbors. Pearson says, “People have been very excited about not paying property taxes or worrying about maintenance. They can sell their house and invest the cash while renting at a reasonable rate.”

The leasing concept is catching on in the mid-Atlantic

In March 2020, Allen & Rocks, the developer of Coastal Run at Heritage Shores in Delaware, started considering offering singlefamily homes for lease. “Really, nobody was doing it, especially on the East Coast,” says Bob Turner, VP and director of residential properties for Allen and Rocks. “What we saw were duplexes. Our concept was to lease the same house you would buy. No different from other houses and with the same benefits. Right out of the gate, people got the concept.” The 55+ active community offers resort amenities, including indoor and outdoor pools, tennis, and an Arthur Hills-designed 18-hole golf course. The market response was eye-opening for Turner, who says, “In the mid-Atlantic, there are now thousands more lease-friendly homes. It’s redefined leasing, giving everyone a new option for living that hadn’t existed before.”

Mary and Rocco DeStefano, who had never rented a home, were unsure of how it would go when they decided to lease at Coastal Run, which offers one- to five-year leases and provides an easy-out option if you purchase a new built-for-you home. They are happy with their decision. “Once getting here, we were pleasantly surprised about how much we enjoyed the community,” says Mary. “Rocco was unsure about living in a 55+ community, and renting is the best way to try it out. We love that when something goes wrong, we just have to make a call and someone is out shortly!”

Shoring up the homes-for-lease market in the Carolinas

Higher home prices and lower inventory drive some to consider leasing instead of buying. That also allows them time to consider the pros and cons of an area they might like to buy or build in. The tactic is becoming increasingly more difficult in some markets. “The rental market has no supply,” says Jerry Helms of the eastern North Carolina market. “Home builders are becoming for-rent builders and building houses for rent in master-planned communities.”

In the Village at Woodside, located inside the private community of Woodside, in Aiken, SC, they are working to solve that problem. “We have sold out our single-family homesites, and we’re working on a mixed-use community,” says Diana M. Peters. “We already have a waiting list of 40. Many of them live in Woodside but are thinking ahead.” The idea is to sell their home and get into a rental where they’ll live an easier, maintenance-free lifestyle. This strategy also means they won’t leave a home, and the work that entails, to be dealt with by their children.

Why lease instead of buy?

There are as many reasons the home leasing market is trending as there are different categories of home seekers. “Not everyone is in the position to buy,” says Turner. “And for a lot of people selling a home, do they want to turn around and put their money in another home? Maybe they just want to have fun with their money. Maybe they don’t have the appetite to own, to take care of a home. Instead, they opt to keep their money in the bank for financial flexibility. There’s no failure factor in leasing. Leasing is simple. If life changes, there’s an easy way out. Little or no risk at all.”

In today’s fluctuating financial and real estate markets, taking the risk out of housing may be the best investment of all.

Rental homes are available in many planned amenity communities, like Brunswick Forest in Wilmington, NC, seen below.