A five-bedroom, five-bathroom palace in the heart of Green Hills would have once been the dream sale of a real estate agent.
In this economy, Summit Property Management has the $3.8 million Woodmont Boulevard home on its list of leasing properties, said Summit Property owner Cory Willms.
Homes For Rent by Owner for $11,000 per month.
Willms, who has been in the rental industry for 10 years, said Green Hills? rental market has thrived partly because of the lagging real estate market.
Homes in the million dollar-plus range sell less often, but property managers are assisting homeowners with leasing their homes until selling is more plausible, said Richard Courtney, managing broker with Fridrich and Clark Realty.
Summit has 100 townhomes and single-family homes rented or available to rent in the 37215 ZIP Code, many of which are worth between $1 million and $4 million.
The high-end properties have changed the rental market in Green Hills, and given homeowners a way to financially benefit without selling their homes.
?I know what people are willing to pay, and I know where they?re willing to pay it, and that?s Green Hills,? Willms said. ?The owners I work with are educated and savvy. They can hold onto a property, even if they lose a few hundred a month to lease it.?
Newcomers like to rent
Green Hills? properties rent for between $1,000 and $14,000 per month, Willms said.
Condominiums, apartments and homes have always drawn in professionals of all ages to the Green Hills neighborhood.
The typical renter is a Nashville newcomer, who wants to get a feel for the city before he purchases a home here. Others may be in the city for a short time because of a job transfer, Willms said.
?A lot of individuals are being transferred here for two to four years, but they want to maintain a certain lifestyle,? Willms said. ?They like the privacy here like it?s far from the city, but it still has the convenience of being close to downtown.?
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Though homeowners see the financial return, the rental rates rarely match their mortgage, Willms said. Rental rates are based on square footage and location, he said.
?We rent for between 70 cents and $1 per square foot, and the price per foot goes down the larger the home,? Willms said. ?Our homeowners rather rent their property for a while, rather than lose hundreds of thousands just to move the property in this housing market.?
Lease now, sell later
Homeowners are also more often becoming tenants in the suburban neighborhood, said Courtney, author of Buyers are Liars and Sellers are Too! While waiting for the economy to improve, some homeowners are leasing their homes in hopes that it will eventually sell.
?We hope that their homes sell eventually, but until they do, we help find them property managers,? Courtney said. ?Leasing is becoming more and more of our (Realtors) daily experience.?
Real estate sales are down 20 to 25 percent in the greater Nashville area compared to 2008, according to Greater Nashville Association of Realtors’ numbers Courtney cited. Between January and August, 35 homes were sold in the greater Nashville area, compared to 93 units sold in the same time period in 2008.
The impact of the economy is even greater for high-end homes, with sales down 50 percent compared to years past.
?It?s happening all over the place,? Courtney said. ?Chris Simms tried to sell his $2.3 million in Green Hills, and now he?s leasing it. That?s the way thing?s are going.?
Less than a million
Even below the million-dollar mark, renting has become a remedy for stalled house sales, said Bill Owen, who owns five homes in Green Hills.
He and his wife Jeanie renovated two of the homes, a $479,000 home on Springdale Drive and a $376,000 home Sharondale Drive, in hopes of selling them in the spring.
?We decided to start putting them on the market, and there was no market,? Owen said. ?We don?t owe anything on them, but it?s still the drawback of not being able to sell them.?
Both homes have since been rented, Jeanie Owen said. Their homes rent for between $1,900 and $3,000 per month.
The cash flow from the rentals is substantial, but the couple said they hope to see the economy bounce back.
?We?re getting older, so we would like to eventually just sell the homes,? Jeanie Owen said. ?Until we can, we?re glad to have great tenants and see that the rental market is still strong.