red_black_logo1

October 2008

Looking for a Hamptons rental? Try winter.

 

As economy slides, East End owners pump their homes for off-season cash

 

A renovated farmhouse at Georgica Beach in East Hampton was rented for the winter.

By Christopher Faherty

Thought the Hamptons rental season was over? Think again. Brokers on the East End are seeing a curious new phenomenon this year. With the economy spiraling downward and Wall Street teetering on the edge, more Hamptons homeowners are looking to supplement their finances by renting out their houses during the winter months.

“There are a great deal more winter and year-round rentals on the market this year,” said Michael Daly, the principal broker at True North Realty Associates. “Home sales and the economy have slowed, and owners are looking for ways to get income out of their properties.”

Daly said there is no real data on winter rentals. But based on newspaper advertisements, he estimated that there has been a tripling of year-round rentals starting this September, and that rental prices have decreased 25 to 33 percent.

The nontraditional rental matrix seems to be paying off for some East End owners.

As the inventory of winter rentals has increased, so has the market for them, some brokers said.

The disproportionate prices between summer (which is high season) and winter can often be a difference between $2,000 and $20,000 a month for the same house.

Off-season rentals are luring renters for varied reasons. In some cases, the winter rentals are taking the place of more expensive vacations or allowing tentative buyers to get a taste of the Hamptons for a cheaper rate. In other cases, it allows those who are doing well in the down economy to escape the city.

“I’ve rented a summer house for the last five years. This year, I felt with the market being the way it is, I’d see what’s out there,” said Mary Miras, 33, a bankruptcy attorney who lives on the Upper East Side and is renting a home this winter in East Hampton for $1,500 a month. “I’m doing this with a girlfriend and another couple; when you split that, it’s like a gym membership, basically.”

Miras, who lives in a one-bedroom apartment in the city, said her business is busy at the moment. She said she’ll use the winter rental to entertain friends and family.

Miras noted that she rents a similar-sized house in East Hampton during the summer with the same friends she is renting with this winter, and they split a rent of $45,000 for the season.

Mary Slattery, an associate broker with Corcoran who has noticed an uptick in winter rentals, said those who are looking for houses in the post-Labor Day market are less interested in the Hamptons social scene than summer renters.

“They don’t come here so they can stand in line for an hour for a cup of coffee at the Golden Pear. They’re more of an outside person,” Slattery said.

Among Slattery’s winter rentals this year was a renovated farmhouse at Georgica Beach that she rented to a 30-something hedge-fund manager who grabs his dog and flees the city on weekends, attracted by the South Fork’s great off-season surfing.

The half-acre property, described by Slattery as “not fancy but really cool,” rents for about $2,500 per month in the winter — and roughly $65,000 for the full summer.

Brokers were in general agreement that year-round rentals, in which renters pay a small charge above the summer rate to keep the property for the entire year, are also on the rise.

George Fontanals, a broker with Brown Harris Stevens in East Hampton, said that many young people in the market to buy are renting year-round and waiting for the market to soften further before pulling the trigger on a purchase.

“It’s hard to say if it’s the right thing to do, because it’s a good time to purchase,” he said.

Karen Benvenuto, a broker with Hamptons Realty Group, said while the number of people searching for winter or year-round rentals may be growing, so is the inventory, because more sellers are renting, waiting for the market to rebound.

It appears that builders of spec houses are also turning to year-round rentals with the softening market. Laraine Hayes, a landlord who rents out six separate homes in East Hampton, said she met a Hamptons spec builder at P.C. Richards as he was buying 13 plasma screen televisions, as part of furnishing a $12 million spec house to rent.

Hayes, who has been renting homes in the Hamptons for 25 years and recently switched with the majority of her tenants to year-round rentals, has one of her properties on the market for $1.499 million but said it may make more sense to rent it rather than sell in the current buyer’s market.

“I’m not very negotiable,” she said. “I need to get this amount, or I make more money renting.”

Advertisements