Homes that Rented Instead of Selling

By Dave Fratello | August 14th, 2018

It's not all that unusual to see a home listed both for rent and for sale.

The seller may have a certain number in mind where a sale makes sense. Otherwise, renting it out, covering expenses and waiting for a better time to sell may seem to make more sense. (Side observation: There may not be a better time to sell for a while. Discuss.)

We took a look at several cases of homes that recently rented out instead of selling.

Interestingly, each and every one is on a busy street.

1740 2nd Street Manhattan Beach CA1740 2nd (6br/5ba, 4000 sqft.) has a pretty long history of trying (kinda) to sell each time the lease comes up, but it's often listed over market value and eventually rents out.

The home was listed for sale and for lease in 2015, 2016, 2017 and this year (2018).

All this began immediately after it was purchased in Dec. 2014 for $2.200M.

List prices have ranged from the $2.4s up to $2.599M (this year's start price).

The posted prices for the leases have ranged from $10,000 (2015) down to $8,900/mo. (most recent).

This year, the lease listing only began after 2 months of not selling at $2.599M and $2.499M.

Most of the others we'll look at don't have anywhere near the repeat-listing history.

3621 Alma (3br/2ba, 2000 sqft.) is a very unusual house along Rosecrans with some views.

The 3-story remodeled home ran a little more than 6 months on the market from January-July at $2.899M down to $2.799M.

A rental listing began in May at $12,000/mo. and they settled at $10,000/mo.

Watch for the for-sale listing to come back, though.

Nearby is a very different sort of example...

New construction at 465 36th Place (5br/6ba, 4300 sqft.) was really trying to find a buyer.

The modern new home, much like 3621 Alma, is actually on Rosecrans, but in this case higher up with more substantial views, and a somewhat more conventional floorplan.

It launched with some pizzazz in October 2017 at $4.250M. They re-listed in February $250K lighter, then came all the way down to $3.599M.

But in May, while making that last big price cut, they also decided to try the rental market.

Asking $18,000/mo., they got $17,500.

Since it would seem the builder can't possibly have been planning to build a high-end rental, expect to see a new listing down the road.

1116 N. Ardmore (3br/3ba, 1815 sqft.) is a downtown condo in the building at the corner of MB Blvd. and Ardmore.

This location is both its joy and its major negative.

It's kind of fun to look directly across the greenbelt to the beach Vons and to know how close you are to the beach and all kinds of downtown attractions. It's less fun to be positioned directly over the traffic coming to a stop at the signal nearby... all day long.

A comparable unit at 516 MB Blvd. (3br/2ba, 1925 sqft.) tried near $2M and sold for $1.800M in Aug. 2016.

They tried to sell 1116 N. Ardmore for $2.285M and down to $2.200M, or 22% more than the comp.

Instead, it's now rented out for $6,000/mo.

One last one we found that has recently rented out was 432 10th Place.

This very custom modern is visible over the parking lot at the downtown beach Vons, and abuts Valley Drive.

The 4br/5ba, 3450 sqft. home was offered for a few months this year, from February to May, at prices of $4.199M down to $3.888M.

Instead, it was rented out for $11,500/mo. in June, with the listing description specifically saying it was for a short term of 2-6 months, so you may see this one come back again soon.

 

 

 

 

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