For Rent in 78735>Question Details

Property Man…, Other/Just Looking in 78735

Interested in Renting: There seems to be a very slim market for renting large homes -- 5 bedroom estates.

Asked by Property Manager, 78735 Thu Aug 13, 2009

This is surprising in this market. Does anyone know what a 7000 sq. ft. very high end (over $3mil) home would lease for....or have any ideas on how to lease it for short periods, e.g. 6 mo to 1 yr leases to relocated executives coming to Austin and wanting to lease until market settles down. Thanks.

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I'll answer this question for anyone that stumbles across it and is interested in how these super high end leases work.

I've handled a number of super-luxury ($2M+) leases over the past 2 years and they tend to work very differently from your usual residential lease. Most times the owner does not want the property in the MLS because they don't want just anyone coming into their home for showings, and they want to limit the potential clients to families with the means to rent and maintain their property. No one wants their house to be part of someone's weekend plans to tour the nicest homes in Austin!

If you look at rental history in the MLS you'll see that less than 10 properties have leased in Austin for over $15,000 in the past 10 years! That doesn't mean that properties like this never come up for lease - instead the owners of these properties tend to rely on agents like myself to have the right contacts and put them in touch with a potential renter. Like many things in this income bracket these deals tend to rely on personal connections and quality targeted marketing.

Another thing about these listings: the lease price tends to fall short of the mortgage payments. There is a steep drop off is lease price compared to purchase price as you climb higher and higher into the most expensive homes.

This means that most owners only take this route when:

1) They want to sell their house but the market is at a low point and a sale would cost them hundreds of thousands of dollars compared to what they bought the home for, or what they think they can sell it for in a year or two. At this point paying $40,000/yr on top of lease income is very attractive since they can recoup three or four times that amount by selling at a high point.

2) The owner has already purchased (or plans to purchase) another home and their current home is taking too long to sell (some homes above $3M can take months to sell even if priced correctly and marketed aggressively - there just aren't as many people shopping for homes in this price range!). Many times these owners will quietly offer their home for shorter term leases (3-6 months, or open ended lease that terminates upon sale of the home). These homes can be an amazing rental opportunity - often the seller will require the renter to provide quality furniture to stage the home and kill two birds with one stone. I've seen homes that could bring $7,000+ rent/month go for as little as $2,500/month. There are a couple quality companies around Austin that specialize in putting together owners and renters for these deals. This was a very popular option during the housing market downturn of the past few years.

3) And finally vacation rentals. Sometimes you'll see these homes on HomeAway or VRBO being offered for rent during events like SXSW or Austin City Limits festivals, Summer vacation rentals (especially popular for lakefront homes), or even year-round. These homes can be rented for as little as a weekend, or as long as months. At my brokerage we've handled many deals like this at a large profit to the owner of the home.

If you have any other questions feel free to contact me at (512) 699-7058 or shoot me an email at andy.thirion@gmail.com. I'm always happy to answer any questions.


Andy Thirion
Posh Properties
0 votes Thank Flag Link Sun May 27, 2012
10 -15 K is about the most lease properties go for!
0 votes Thank Flag Link Sun Nov 14, 2010
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