In The Beginning…

You ever wonder what happened after the song about Jack and Diane ended? You know the one, where life is a party and everything will be okay as long as you believe in love? What happened when it came time for them to sit down with a mortgage broker and discuss where they were going to grow their family? There is a lot of tangible equity in love, but not when it comes time to buy a home.

So, we pose a little question here: what if there was a way for Jack and Diane to live the life they wanted, traveling around and just being in love, all while building equity for when an heir to the throne comes naked and screaming into the world? Let’s bring them into modern times, and use them as a case study to examine how Rent + Equity would benefit them, an infinitely small cross section of society.

What exactly is, “Rent + Equity”?

Excellent question! It’s a simple concept — renters now have an opportunity to invest in themselves, their home, and their community by being rewarded with an equity stake for doing stuff that they’re already doing, such as paying their bills on time and treating their home with respect. Landlords win by getting a series of tenants who are excited to take care of the property, and tenants get a landlord that is invested in making sure the home is well-maintained. There is a larger picture to this, but that’s for a different blog. Back to Jack and Diane!

Rent + Equity Benefitting the Youngin’s

Jack and Diane are kids. Not lemonade stand on the corner kids, but freshly out of college. There is a lot of change happening on a macro-level scale — new jobs, new cities, new friends. Rent + Equity benefits them by being a solution to their housing questions, while providing a long term benefit. Let’s assume the two kids are currently renting an apartment from a developer, and building equity in the process. The landlord is leery — college level kids aren’t highly-regarded for leaving places immaculate, but is comforted by knowing that there is something on the line between them, aside from the onboarding process, which clearly emphasized responsibility and personal ownership in the rented property.

At this point, Diane accepts a promotion that moves her and Jack across country. The landlord gets their property back in tip-top shape, while J + D hit the bricks. Aside from any refreshing that the landlord wishes to do, this baby is ready to rent again. No full-tearout required.

Moving On Up…

Jack and Diane are in their early/mid 30’s. They’ve settled into a Rent+Equity style home, where they’re still building equity, but are more concerned with growing their family. One big challenge for younger professionals has always been finding their tribe, finding ways to get involved with new people and to start connecting into the community. Just as when J+D were having a blast in college, they’re now surrounded by their peers and don’t have to worry about meeting new people.

They continue to rent a larger home from a landlord with the same conditions as before. If something happens and they need to move again, they’re fine to do so. The flexible lease style and rent payments that work as an active investment in their own interest mean that they can focus on either saving for a home while using their existing equity, attack their student loan debt, or buy Jack a new powerboat, because he’s suddenly taken a liking to cigar boat racing off the coast of Florida.

…to Settling On Down

Jack and Diane are in their early 60’s now. Their parties look a little different now — there are fewer keggers, but they’re still getting tipsy! But it’s tipsy in what they think is a classy way: wine tasting, going out to eat all the time with friends, having sophisticated fundraisers and mind-blowing galas. Diane can’t quite do a keg stand like she used to, but knows how to throw a hell of a cookout, and Jack’s doctor warned him about his powerboat addiction. They’ve been in a Rent+Equity situation for awhile now, and couldn’t be happier. The local community has been more than welcoming, and they know that this is where they want to downsize and settle down. Rent+Equity shines here, by allowing them to purchase a home in an active, walkable community with all of that stored equity, plus the money they saved over years of renting smart.

Pause: what if they don’t want to settle down? They can continue to move around and live the gypsy lifestyle! Rent + Equity allows them to be mobile on the power of short term leases and enjoy different communities if they want. They suddenly have the option of moving closer to their kids and grandkids (or farther, let’s be honest), and exploring new parts of the country.

So…How Does It Benefit All Society?

Jack and Diane above are a micro-level example of something powerful that can be taken to a macro scale. Full communities of renters investing in their own neighborhood while building equity creates a power vacuum where vast amounts of wealth can be generated over time to affect change on a local scale. When one person leaves the community, another replaces them, sans any of the aforementioned refreshing that needs done — think new roof, new carpet, etc.

Aside from the potential financial benefits to local businesses and governments as a result of community reinvestment strategies, imagine the personal benefits from moving into an active, engaging community. People seek community — we need to look no further than churches, coffee shops, and coworking spaces to prove that. These communities easily shine when compared to a traditional rent situations, especially when you start to hear phrases like, “slum lord,” “lazy landlord,” and “do you smell that?”

Taking the mindset of, “We’re Better Together” and applying it to housing creates the opportunity for happy, motivated people to affect positive change on a potentially national level.

As for Jack and Diane? Looks like they did just fine.

Interested in learning more about the Rent + Equity model, or looking to start your own? Reach out to us! We can talk all day about this stuff.

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