This year's frenzied real estate market has pushed prices up considerably, as we'll be exploring in depth in the fall issue of CA-Modern magazine. But it has also pushed rents up. And while mid-century moderns command a premium when offered for sale, the same is not generally true for rentals. Though the rising tide effect means pretty much all rental properties in desirable neighborhoods are getting top dollar.
As The San Jose Mercury News reported earlier this year, rents have been climbing in the double digits until just a few months ago. And the San Francisco Chronicle noted that many units built as condos, which became rental units during the real estate crisis, are now swinging back to condos.
The growing rental crunch got me wondering what role MCM houses play, so I called realtor Glenn Sennett, who manages rental properties but also represents houses for sale in the San Mateo Highlands, giving him a unique perspective. In general, Sennett said, a unit's original MCM credentials will help it sell for a premium, but its bedrooms, bathrooms, and overall condition are what will command higher rents. But the market is so tight right now that almost any property will rent for a lot, especially if it's within range of Silicon Valley.
"I just listed one on Lexington [Avenue, in the San Mateo Highlands], and I put it out there for a day or two, and I probably had 50 or 60 flyers taken within the two days. And 10 people who wanted it. It was a nice house but nothing spectacular. It had a view toward the reservoir. I was asking $4,000. When I rented it seven years ago it was $2,800. We wound up renting it for $4,200 because the people wanted it so bad they offered an extra $200 a month," Sennett said.
In general, Sennett said a four-bedroom, two-bath home in nice condition would fetch anywhere from $3,800 to $4,000 a month, whereas two years ago it would have gone for $3400. "So we can call that a $600 a month increase in two years."
Buyers looking for mid-century modern homes often want original items they can turn into showpieces. Renters, meanwhile, want spaces that are easy to live in. For that reason, the non-MCM homes Sennett represents, which are a bit larger on average, command a higher price.
"Generally speaking, [buyers] don't care what the inside of the house looks like. They want the location, the view, the flat lot," Sennett said. "So that's almost completely opposite if you're renting. Renters want a livable house."
The bottom line: If you want to make money from your mid-century modern's vintage cache, you're going to have to sell it. But if you want to keep it occupied and cover the mortgage while you're not living in it, there should be no shortage of potential tenants willing to move in.