It's a saga seemingly without end – the effort to put some warm bodies into 4419 Highland
, by any means necessary. (Click address for pics & listing details via Redfin.)
Longtime readers will recall that we've been wondering about this home since it was but a hole in the ground, more than a year ago. It's one of the more prominent houses in town simply because thousands of commuters pass this landmark each day; it's the first house they see coming home. That's why we called it the Gateway to Manhattan Beach.
It's also one of the worst locations in town, thanks to traffic, tank farms, utility lines, a gas station, etc. (Click the smaller pics to enlarge.)
We concluded our first story
on the house with this question: Was this really such a good idea?
If the plan was to make it a rental, then sure, it's working out fine, as evidenced by the giant "For Lease" banner that went up this week. But you know that wasn't the plan.
We're told they're asking $6,500/mo.
for the privilege of living in this new construction with 4br/3ba and almost 2000 sq. ft. It's just steps to the beach. There's also a convenient snack shop just across the street (at the Chevron). And you can check the waves, or the traffic, right there from your bedroom. Such a deal.
The rental option is another twist in the story that included these stages:
- Aug. 2005: Builder buys the lot for $730k
- Feb. 2007: Construction begins
- March 2007: The whole project is offered on Craigslist, midstream, for $1.4m; the pitch says that comps are in the $1.6m-$1.7m range
- June 2007: Listing begins at $1.695m, pre-completion
- Oct. 2007: A taxi skids on rain-soaked roads and hits the fireplug at the corner, showering the front of the home; the listing soon gets a new agent and the price drops to $1.499m
- Nov. 2007-Jan. 2008: In $50k increments, the price comes down to $1.350m
- March 2008: Price slips to $1.299m
- April 2008: Giant "For Lease" banner goes up
It's all kind of amazing. Two and a half years have passed since the lot was purchased; 14 months have gone by since construction started; and the completed home has been marketed for 6 months. There's a serious need for some cashflow ASAP.
Long ago, commenters here at MBC declared that this home would wind up a rental. Spot on. Bravo.
Now that we have a proposed lease price, it's possible to compare renting vs. buying 4419 Highland.
If you were to buy the home, one mortgage calculator gives a rough monthly payment of almost $7k
– assuming a 30 yr fixed at 7% with $260k
down (20%) on $1.3m
, its current price. Add property taxes, too ($16k+/yr.; $1,350/mo.) and you're at $8,350/mo.
But let's not be short-sighted. Buying often proves the better deal over time, doesn't it?Another mortgage calculator
spits out this rent/buy advice, when we say we have $260k to put down and want to spent $6,500/mo. on a mortgage payment (same assumptions as above):
After 30 Years you will own a $ 3,472,001.54 house and have saved $381,640.23 in Income Taxes on Interest Payments of $ 1,363,000.81
Instead we take your downpayment and let it grow
After 30 years your $ 260,000.00 has increased to $ 3,005,145.43
You see, if you take the long view, in 2038, this charmer will be worth $3.5m
. Clearly, it's better to buy.