Editor’s note: This article was first published in June 2013 and describes that summer’s rental market; the record numbers of 1 million and 900,000 dollar rentals, the broker commissions and the Spanish luxury rental prices it cites are from that season.
In the middle of an economic crisis, there are people who do not mind paying 1 million dollars to rent a house for the summer. H. Dolly Lenz, a Manhattan real estate broker who specialises in the luxury market, says that the growing number of deals being closed for these sums of money is unprecedented. “Demand isn’t strong, it’s incredible”, the broker says.
According to CNBC, records are being broken both in the amounts paid and in the number of luxury rentals.
Most million-dollar rentals are not advertised on property portals, do not appear on the internet and are not in the databases of agents at other agencies. There are a few brokers who specialise in this luxury market, and they generally offer these properties only by word of mouth.
The record for homes put on the market at these prices, and the record for deals closed, is being broken in the Hamptons, an area on the eastern end of Long Island in the state of New York.
Nobody knows which houses they are, who owns them, much less who the wealthy people renting properties of this value are, because of the confidentiality required of these real estate agents, although it is rumoured that several of the properties already rented for this summer for 1 million dollars and for 900,000 dollars may have gone to Russian businessmen.
What kind of homes are they renting?
According to this Manhattan broker, someone who pays that kind of money for a home is not doing it to spend a lot of time away from the house. They do it to enjoy the home to the fullest, so they want it to have more than 6 bedrooms (some of these houses have as many as 15), an outdoor pool and even a heated indoor pool in case the weather does not cooperate. A padel or tennis court, lots of space for the children, and so on… in short, they want to enjoy their holidays inside the grounds.
One of the houses rented in the Hamptons last year had 12 bedrooms with 12 bathrooms and 12,000 metres of land, with a large pool, mini golf, a tennis court…
We do not know what commission brokers receive for a summer rental deal either, but it is estimated that a broker could pocket around 30,000 dollars for each deal of this kind, and figures as high as 70,000 dollars have even been mentioned.
Without a doubt, the luxury market is still one of the most profitable businesses today.
In Spain, this luxury rental market may also have its demand, although clearly at much lower prices. If we go to the Marbella area, Mallorca or Ibiza, we would also find some summer rental deals closed for between 60,000 and 150,000 euros, which is not bad at all. In Spain, though, the boom is not so much in luxury rentals as in the sale of luxury homes, with million-euro deals closed every week in the most exclusive areas of Madrid, Barcelona, Marbella and Mallorca.
See also: The best homes built from shipping containers
Featured image: Dougtone, CC BY-SA 2.0, via Wikimedia Commons.
_070409_418.jpg){kind=link}