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Adapting to the market
Rentals, other arrangements rise in county
Many office complexes like this one are seeking renters or leasers in today's tough economy. - photo by Jennifer Sami
Forsyth County continues to attract new residents despite the recession.

But tough times have led to a new trend. People who once bought a home when they moved to the county are renting in order to stay here.

“As more and more people lose their houses to foreclosure, they’re looking for rental houses,” said Janet Kitchens with Lakeside Realty. “We’re certainly getting a lot more calls than we did before about renting and is it available for lease purchase.”

With job losses and high mortgage rates, Kitchens said many homeowners are trying to rent their homes, even if the rent doesn’t fully cover the mortgage.

One of her clients put a four-bedroom, 2.5-bathroom home on the market, hoping for a quick sell. After six months, Kitchens said the client decided to look for renters.

Though renting the home, the $1,200 per month rental price doesn’t cover the full mortgage payment. But, she said, it was “better than no money at all.”

Renting a home does come with risks, Kitchens said. The homeowner still is responsible for maintenance and running credit checks on potential renters. Renting also raises the risk of property damage.

“Nobody is going to take care of the house the way that you would take care of it, and that’s a tough thing for people to swallow,” she said.

The risk of renting wasn’t worth it for Terry Swanson, a mortgage broker.  His home wasn’t selling and he had tired of his high mortgage payments.

Instead of renting, he opted for a lease-purchase agreement, which allowed him to collect a down payment with the understanding the family would buy his home by an agreed upon date.

The buyers assumed his mortgage payments and Swanson, who has temporarily moved into an apartment, would keep the down payment money if the buyer reneged on the deal.

In the meantime, he no longer faces high mortgage payments. The other family is able to live in their future home while building credit.

“Lending requirements just make it a little more challenging for people today,” he said. “This makes it a great opportunity for a seller to get their home off their plate.

“As opposed to being a landlord, you’re going to get people who are going to treat it as their home, and that’s a big difference.”

Scott Whelchel with Results Realty Services said the renters’ market is a two-way street.

Home sellers become home renters as they struggle to compete with foreclosures, which he said are being sold for 60 to 70 cents on the dollar.

And foreclosure sales aren’t few and far between. Half of the homes sold in the past month were bank-owned, he said.

“There are folks that have lost their home to the bank, there are folks that can’t quite afford the payment or don’t have the credit for the house that they need, so they’re having to rent,” Whelchel said. “A lot of people are just walking away from their homes.”

But when they walk away, many aren’t choosing to buy again, at least not yet.

“There are so many people that are losing their homes and having to downsize that they have no alternative but to rent,” Whelchel said.

Not everyone is running to rent a home.

Bonnie Spinks, assistant manager at Aubrey’s Landing, said the Forsyth County apartment complex is at 97 percent capacity.

“Starting in March, April and May, it’s really picked up,” she said. “Where we first saw the drop was around December and January from 2008 to 2009. Our lowest was at 90 percent.”

Most tenants are coming from a house. Demand has shifted as well,  Spinks said.

“We have noticed more people are doubling up, like roommate situations, whereas maybe they would both get one bedrooms,” she said. “But now everyone’s kind of doubling up to split the rent. We’ve definitely noticed a trend in that.”

Spinks said when rentals dropped off in December, management decided to lower rates about $100 in January. There also are lofty referral incentives for renters recommending the complex.

Many owners of commercial properties also are offering deals.

“We’re seeing entrepreneurs going into these strip centers and are cutting themselves pretty good deals, 20 to 30 percent off the base rate,” said Frank Norton Jr., president of the Gainesville-based Norton Agency.

He said the going rate for a retail site is around $13 to $17 per square foot annually, which translates to $1,625 to $2,125 per month for a 1,500-square-foot location.

“Some of the higher vacancies are in shopping centers in North Georgia that are above that number,” Norton said. “It may be well worth it, but in this market, people are retreating to value.”

Brent Hoffman, a commercial agent with Prudential Georgia Realty, said those seeking out commercial space may find a bargain.

“It’s a tenant’s market,” Hoffman said. “I would lock in for as long as I could.”

The economy is having little impact on The Columns at Pilgrim Mill, a transitional apartment complex.

Property manager Nancy Wright said 80 percent of her tenants have never lived in an apartment before and are waiting to sell, buy or build a house. Others are just moving to the area.

In its two years, the Columns has averaged in the high 90 percent range in occupancy, Wright said.

“I have people from all over the world ... moving into this area,” she said. “This is the No. 2 place, according to Forbes [magazine] to get ahead, so people are moving here still.”

Harris Blackwood and Melissa Weinman of the FCN regional staff contributed to this report.

E-mail Jennifer Sami at