Townhome Leasing

[roadrunner]

I'm looking to lease a townhome inside the loop. Har.com is probably my best bet, but is there anything else out there that can help me?

[travelguy_73]

Craigslist is big with the for-sale-or-lease crowd.

[Mr. Chenevert]

www.har.com worked for me. You can haggle the prices as well.

If its a fairly new place (ie, less than 5 years old), you can look at hcad.org and get a fairly good estimate of the price the landlord paid for the property. Calculate a simulated mortgage payment assuming 20% down. Add it taxes and insurance, and possible HOA fee's and you will have a fairly accurate estimate of the owners monthly payment.

Offer him or her $150 less per month than what you think they are paying.

I have found this to work twice myself, and another time for a close friend. Many homeowners are having problems selling their homes right now and choose to lease their existing property. They are willing to take a slight monthly loss in order to keep the property until the market rebounds.

[HoustonRealtor]

www.har.com worked for me. You can haggle the prices as well.

If its a fairly new place (ie, less than 5 years old), you can look at hcad.org and get a fairly good estimate of the price the landlord paid for the property. Calculate a simulated mortgage payment assuming 20% down. Add it taxes and insurance, and possible HOA fee's and you will have a fairly accurate estimate of the owners monthly payment.

Offer him or her $150 less per month than what you think they are paying.

I have found this to work twice myself, and another time for a close friend. Many homeowners are having problems selling their homes right now and choose to lease their existing property. They are willing to take a slight monthly loss in order to keep the property until the market rebounds.

This will likely work better for properties that are owned by investors. Properties that are owned by individuals that decide to lease rather than sell (for any number of reasons) won't likely be as negotiable.

I ran a quick report in MLS for townhomes/condos that leased in area 16 (Central) during the month of December. I had no other criteria to limit the search. On average, they leased for 98% of asking price, which amounted to a $38 reduction. In addition, 29 of the 42 properties (69%) leased for full asking price.

Knowledge is power. I hope this helps in your search!

[Mr. Chenevert]

While your report may be accurate, I think it is safe to assume that most tenants do not even attempt to negotiate the rate. That would skew the results.

I will use my next door neighbor as an example. Their midtown townhome went unsold for over 6 months. Their new home was finished and they decided to try leasing the property instead. Within days, they property was leased. He is and was willing to take a slight monthly loss for the next 12 months in order not to have to pay dual mortgages.

I would think this would be the normal mentality for the average homeowner.

[Mr. Chenevert]

BTW, if the average reduction of 42 properties was $38, but 29 paid full price, then the actual average reduction was $122 for the 13 properties that did not go full price.

That supports my $150/month reduction strongly.

[diggity]

BTW, if the average reduction of 42 properties was $38, but 29 paid full price, then the actual average reduction was $122 for the 13 properties that did not go full price.

That supports my $150/month reduction strongly.

no, it just means that only 30% of the lessors negotiated at all. you have no way of knowing if the lessee attempted to come in at a lower price. and your figure of $150 was not based on asking price, but on your "estimate" of their carrying costs

nice spin though!

Edited January 9, 2008 by diggity

[Mr. Chenevert]

no, it just means that only 30% of the lessors negotiated at all. you have no way of knowing if the lessee attempted to come in at a lower price. and your figure of $150 was not based on asking price, but on your "estimate" of their carrying costs

nice spin though!

You dont think a homeowners carrying costs and their lease asking price would be very similar?

[HoustonRealtor]

My intention was not to stir up trouble, but to ensure that roadrunner (or any other potential renter) knew what the numbers showed. I agree that some renters may not have tried to negotiate at all, but at the same time, it is possible that they did and they just weren't successful. If a property is listed in MLS, I would hope that the listing agent would share the same type of info with their client at the time they list the property and when an offer comes in. And if they do so, then their clients will see the trends. If I was a landlord and saw that properties weren't being leased for drastically reduced amounts, I wouldn't want to give someone a drastic reduction on mine. Of course, if I am highly motivated...or even desperate...everything changes. By no means do I encourage someone going in and paying full price just for the heck of it, but I do think it's worthwhile knowing that a $150 reduction in rent is more of the exception than the rule.

[diggity]

You dont think a homeowners carrying costs and their lease asking price would be very similar?

notice i put "estimate" in quotations. i'm just saying that your methodology is a bit suspect. if you're going to base this entire thing on HCAD estimates of property value (which most homeowners do everything in their power to keep as low as possible) you're probably going to end up with some bad numbers.

if this method has worked for you in the past, more power to you. i just don't think it's great advice in general. especially in a renters market like we have right now. i can't find 2 bedrooms in decent areas to save my life...and if i tried to come in at with a low ball offer, the agent would laugh at me.

Edited January 9, 2008 by diggity

[jm1fd]

You dont think a homeowners carrying costs and their lease asking price would be very similar?

Looking at what's for lease around me, my lease asking price would be several hundred dollars a month over carrying costs.

[Mr. Chenevert]

To be honest, when I rented my current townhome, it was still during the housing boom. Renting wasnt the "in" thing and therefore I might have been in the right place at the right time. However, I knocked $500/month off of asking price. I would assume that $150 would be cake.

Also, my example of my next door neighbor is very recent (in the past month).

Also, notice my hcad example said it had to be new construction. I find hcad to be very accruate for brand new construction since all the comps, are well, comparable.

[diggity]

you said recent construction....and HCAD isn't a great barometer even with new construction. after a few years you might as being using zillow.

if you're truly looking to find out what they paid for the house, that information can be obtained very easily from any member of HAR.

i'm also curious as to why you feel the homeowner should lose money on a lease every month?