High-End Home Sellers Turn to Leasing, DP

Frank Danzo holds his son, Zach, 3, outside their Cherry Creek North home. The house didn't sell for the $1.8 million asking price after about a year on the market, so Danzo is now trying to lease it, something more luxury homeowners are considering.
By Margaret Jackson, Nov 20, 2008 The Denver Post  Article link

When Frank Danzo's Cherry Creek North home didn't sell after he dropped the price to $1.8 million, he decided he'd try to rent it. The 6,700-square-foot house has languished on the market for about a year since Danzo and his wife, Denise, moved to a larger home in Cherry Creek North, so now they want to rent it to help pay the mortgage.

"We kind of expected it would sell fairly quickly, and it didn't," Danzo said.

He'd like to find someone to lease the six-bedroom, five- bath house for about $6,000 a month for six months to a year. He's also considering a lease with an option to buy.

The glut of homes over $1 million on the market has many sellers considering leasing. In most cases, the rent doesn't cover the mortgage, but it helps.

"They're looking for ways to ride out the market," said Edie Marks, a broker at Kentwood Co. who specializes in luxury real estate.

In her more than 30 years in the real estate industry, Marks said, she's never seen sellers put their luxury homes up for rent.

With markets in other parts of the country in even worse shape than Denver, there are many people looking to rent while they're waiting for their homes to sell, said Rollie Jordan, another Kentwood broker who specializes in luxury sales. Jordan said she's worked with several chief financial officers of major Denver corporations, as well as a sports star, to find rental property while they're waiting for their homes in other markets to sell.

"It's a trickle-down effect. They're renting for a year or so until the market picks up and the homes in the areas they live in sell," she said. "Then they'll buy a home in Denver from me."

Among Jordan's clients is former Avalanche player Karlis Skrastins, who was traded to the Florida Panthers. Skrastins is renting a home in Florida while Jordan tries to either sell or lease his home on Cook Street in Cherry Creek North.

"In this economy you have to be creative," Jordan said. "I am a real estate professional and if I am asked to help with a rental, I'm happy to do so."

The 4,876-square-foot home is listed for sale at $1.9 million and for lease for $4,500 a month.

"It's a really sexy, hot place," Jordan said. "But I had to take the pool table out of the living room because the wives were saying it's a bachelor pad. The husbands loved it."

Marks refers clients who want to rent their homes to specialists such as Mary Bartos of Front Range Property Rentals LLC.

"They're just huge mansions, and they're not moving," said Bartos, who has about a half-dozen high-end homes available for lease.

Bartos said she hasn't had any negative feedback from neighbors of the rental properties she's handling.

"They are at first very skeptical," she said. "But you have to jump through a lot of hoops to rent one of these houses. You have to have an extensive background check. You have to have great tenants with great credit."

Another client of Bartos, who asked not to be named, said she leased her 6,000-square-foot Cherry Hills Village home to an oil executive and his family after it had languished on the market for about eight months.

"We had showings, but it just wasn't selling," the owner said. "We had it for sale, and we had it for lease, whichever came first. We would have preferred to have sold it, but with the timing of the market, the leasing came up first."

It's not just the high-end homes that sellers are trying to rent. Dee Chirafisi, broker/owner at Kentwood City Properties, said it's a trend that's happening in all price ranges.

"In 15 years, I've never done any leasing until this year — even in the low end," Chirafisi said. "People are just putting it out there, and whatever happens, they're OK with."

Lynne Ida's Curtis Park home has been on the market for six months. She dropped the price from $420,000 to $360,000 and now is trying to lease it for $1,650 a month.

"I'm not in the kind of situation where it's going to go into foreclosure or anything like that," she said. "I'm just riding out the market. I would prefer to sell it."