Megatel Homes, a Texas-based homebuilder that funds part of its operations through private placements offered by its capital markets division Megatel Capital Investment (MCI), has launched a program that can provide renters with up to 12 months of rent-back to use towards new home purchase costs. In partnership with select apartment communities, the Megatel Rent-Back program will rebate up to one year of rent payments at lease-end to renters who choose to purchase a home.
Megatel Homes is in the process of filing for a patent on the program, which marks a new direction into the multifamily space for the company.
“We have launched this rent-back program to create a bridge between renters and homeownership,” said Zach Ipour, co-founder of Megatel Homes. “We are seeking to provide a solution to one of the biggest hurdles many would-be homeowners face – the lack of funds to pay for upfront homeownership costs.”
According to data provided by Zillow and Trulia Research, 86 percent of millennials (those between 24 and 38 years of age) would like to purchase a single-family home, yet only 42 percent of this demographic cohort are homebuyers. The primary reason for this difference is the upfront costs required to purchase a home.
“Megatel is diversifying its business into more affordable and higher density housing, including multifamily communities,” explained Aaron Ipour, co-founder. “Our focus, however, remains firmly fixed on single-family homes. The rent-back program will help us achieve success in the multifamily arena while simultaneously creating new homebuyers – it is a win-win for our business.”
Megatel said that it recently tested the program at a newly built Dallas-area apartment community, where the program is credited with driving occupancy growth and has also allowed the property to reduce rent concessions typically offered to entice renters.
Dallas-area multifamily communities in lease-up have among the highest level of rent concessions in the country.
“We are building a better housing model and a stronger company at the same time, which is an important step forward to our ultimate goal of listing Megatel on a public stock exchange,” said Zach Ipour. “We are very proud of this revolutionary program, which will propel our company to new heights while opening the door to the American dream to a whole host of people who would never be able to purchase their own home.”
Ipour continued: “Aaron and I have been entrepreneurs for many years and have witnessed many of our ideas successfully implemented. The Megatel Rent-Back program is perhaps the idea we are most excited about and have been thrilled to see the significant success it has already achieved. We look forward to seeing it grow and transforming the process of homeownership.”
Founded in 2006, Megatel Homes is one of the largest homebuilders in the state of Texas, with more than 100 developments comprised of several thousand homes completed since its founding. The company currently has more than 100 communities and is spreading throughout the Dallas-Fort Worth metroplex.