Rent-to-buy plan gets residents in the door: by offering residents a chance to invest in the purchase of a home, one Chicago lakefront community developer is landing longer-term residents.

A recent national resident satisfaction survey showed that homebuying and relocation are the top reasons why residents say they are not "very likely" to renew their leases, representing 40 percent of residents surveyed. But some apartment owners have found that they can turn those aspiring homeowners into long-term residents by offering rent-to-buy amenity plans.

The Shoreham at Lakeshore East, a rapidly growing $4 billion mixed-use development in one of Chicago's trendiest new neighborhoods, is one apartment community that has benefited from such a program.

According to Robin Berger, President of NNP Residential LLC, the leasing/management firm for The Shoreham, and Chief Marketing Officer for Lakeshore East's developer, The Magellan Development Group LLC, 70 percent of the building's residents have signed up for the program that earmarks a portion of their rent for a home purchase at Lakeshore East.

"We're convinced that our RentBOY plan has had a very positive influence on attracting renters to The Shoreham at what we believe was a record pace: The 548-unit The Shoreham was 98 percent leased one year after opening," Berger said. "Besides this leasing achievement, the RentBUY program has spawned a corollary economic benefit. For those renters who eventually choose to buy a home at Lakeshore East, the plan has clearly energized our for-sale marketing program with more than a dozen purchases."

Through its marketing materials, NNP presents a financial plan that torches the conventional notion that rent is basically money down the drain and contributes nothing toward homeownership.

Residents who sign up, without obligations, can apply as much as 25 percent of their monthly rental payments toward up to 2.5 percent of the purchase price of a new condo at a participating Lakeshore East building. For example, that would translate to $7,500 if purchasing a $300,000 unit.

Of course, financing a purchase is not the only mind-boggling issue confronting would-be homebuyers.

"In many instances, given today's wide variety of loan options, the dream of homeownership is not as far-fetched for younger buyers as it once was," said Steve Laner, Vice President of Perl Mortgage LLC, a leading Chicago mortgage company.

"These are often savvy young professionals who understand that the way real estate values have been escalating, owning a home is, among other things, a smart investment. It competes favorably with owning stocks or bonds, it can produce tax breaks and helps establish good credit ratings."

So what's the hang up?

"In many instances, people who might qualify financially aren't sure if they will remain in their present positions or if they might be relocated, or they aren't certain if they want to continue living in that neighborhood on a long-term basis," Berger said.

RentBUY, she said, helps to dissolve those nagging questions. At no cost or obligation, it sets the stage to enjoy life as a renter while saving toward future homeownership.

"You start building equity simply by paying your rent," said Jim Loewenberg, Co-Chairman of Magellan Development Group. "Residents receive a payback if they become future owners. It's a great program for people who aren't certain if they want to rent or buy and for those who want to own but can't afford to do so immediately."

Larry Schaffel is Public Relations Director for Magellan Development Group, Chicago. For RentBUY information, contact Robin Berger at 312/440-8500.