It's a saga seemingly without end – the effort to put some warm bodies into 4419 Highland, by any means necessary. (Click address for pics & listing details via Redfin.)
Longtime readers will recall that we've been wondering about this home since it was but a hole in the ground, more than a year ago. It's one of the more prominent houses in town simply because thousands of commuters pass this landmark each day; it's the first house they see coming home. That's why we called it the Gateway to Manhattan Beach.
It's also one of the worst locations in town, thanks to traffic, tank farms, utility lines, a gas station, etc. (Click the smaller pics to enlarge.)
We concluded our first story on the house with this question: Was this really such a good idea?
If the plan was to make it a rental, then sure, it's working out fine, as evidenced by the giant "For Lease" banner that went up this week. But you know that wasn't the plan.
We're told they're asking $6,500/mo. for the privilege of living in this new construction with 4br/3ba and almost 2000 sq. ft. It's just steps to the beach. There's also a convenient snack shop just across the street (at the Chevron). And you can check the waves, or the traffic, right there from your bedroom. Such a deal.
The rental option is another twist in the story that included these stages:
- Aug. 2005: Builder buys the lot for $730k
- Feb. 2007: Construction begins
- March 2007: The whole project is offered on Craigslist, midstream, for $1.4m; the pitch says that comps are in the $1.6m-$1.7m range
- June 2007: Listing begins at $1.695m, pre-completion
- Sept. 2007: Exterior is finished, price cut to $1.580m, listing touts "Three Levels of Bliss!"
- Oct. 2007: A taxi skids on rain-soaked roads and hits the fireplug at the corner, showering the front of the home; the listing soon gets a new agent and the price drops to $1.499m
- Nov. 2007-Jan. 2008: In $50k increments, the price comes down to $1.350m
- Feb. 2008: The exterior stucco gets a two-tone paint job
- March 2008: Price slips to $1.299m
- April 2008: Giant "For Lease" banner goes up
Long ago, commenters here at MBC declared that this home would wind up a rental. Spot on. Bravo.
Now that we have a proposed lease price, it's possible to compare renting vs. buying 4419 Highland.
If you were to buy the home, one mortgage calculator gives a rough monthly payment of almost $7k – assuming a 30 yr fixed at 7% with $260k down (20%) on $1.3m, its current price. Add property taxes, too ($16k+/yr.; $1,350/mo.) and you're at $8,350/mo.
But let's not be short-sighted. Buying often proves the better deal over time, doesn't it?
Another mortgage calculator spits out this rent/buy advice, when we say we have $260k to put down and want to spent $6,500/mo. on a mortgage payment (same assumptions as above):
After 30 Years you will own a $ 3,472,001.54 house and have saved $381,640.23 in Income Taxes on Interest Payments of $ 1,363,000.81
You see, if you take the long view, in 2038, this charmer will be worth $3.5m. Clearly, it's better to buy.Renting Analysis
Instead we take your downpayment and let it grow
After 30 years your $ 260,000.00 has increased to $ 3,005,145.43
30 comments:
But if you also invested the excess payments ($8350 minus $6500), you might end up with more in the investment account. Of course, you'd have to account for the fact that the mortgage payment would stay stable over the years (while property tax would go up), but rent would also go up. A more complex calculation -- not sure how it'd come out.
Wow, I drive past this place every day and am always amazed by the location of the house. It is really a bad one, can you imagine hearing Highland traffic 24/7???
You'll always hear traffic and see it.
FYI the master BR is on the second floor right at the corner looking down at Highland and the gas station.
The first-floor room at the corner was staged as an office, so you'd be working at a desk, looking out the window at a constant stream of cars coming right at you. Yikes. Better to use that room for Costco shelves, methinks.
This house suffers from the most chronic case of "missed opportunity" ever. For all the drawbacks of the location (traffic, plant, gas station) it is still incredibly high visibility and, for all practical purposes, serves as our de facto "welcome to manhattan beach" sign. How pathetic that we let it become the ultimate example of the cheap, poorly designed, developers' "box" that plagues our community. Someone should start a petition to have the city buy that house, tear it down, hire a capable architect and build something remarkable. As a MB resident who is bid farewell and welcomed home daily by that eyesore, I'd much rather have my tax dollars go to that then a few new benches and flower gardens on the strand. I'm dead serious. Tear that f'ing eyesore down.
Great article, still lauging at the taxi taking out the fire hydrant and water spewing over the front of the home. You can't make this stuff up.
MBC wrote, "Long ago, commenters here at MBC declared that this home would wind up a rental. Spot on. Bravo."
Yes, please, step forward to accept your prizes. Wait a minute, you're anonymous. So am I. Oh, I win! I win! I win! Hot dog!
I think we've overlooked one of the positive aspects of this property: it's right across from the re-modeled Chevron station and mini-mart, so gas and groceries are right at your fingertips. And that particular Chevron will never run out of gas because it's built on top of the Chevron refinery. Hey, what's that agent's number.
I actually like the look of this place, but can't see who in the world would want to own or rent it. This seems to be one of the many examples of architects who have never actually seen the location drawing up plans, as no one in their right mind would put balconies on this place. After all, why in the world would someone ever want to step outside?!?!?! I think the same thing when I walk into beautiful new construction only to find a window seat or a deck with front and center views of the refinery.
One lingering question is, what kind of car would fit in that garage. Definitely not an suv. Maybe a Mini?
Is this going to be a summertime flophouse/rental by the week?
Luckily, the price should keep the "floppers" out who want to rent by the week. We live in West LA, but rent a walk street home in MB for a week in the summer. The good ones are always north of 4000+/week in the prime swimming months.
This property should be put on a poster to demonstrate the not-so-hidden costs of our addiction to cars and gasoline, and the bleak, wide, noisy, dirty streets that are required to service that addiction.
The house is "OK", given the space limitations of the site, but the area is not in the remotest way suited to human habitation - least of all for $8,000 per month.
I LOVED your rent versus buy analysis. It made me proud of my MBA degree!
45th/highland serves as a fitting tribute to the area's local spec builders and the magnificent real estate run up of 2002-2007.
City of MB should place this fine house at the top of its list of historical landmarks.
Why spend so much time on this property? Is it because we all love a good train wreck?
Buy now, and be priced in forever!
The City of Manhattan Beach should take some responsibility for having zoned this lot residential versus commercial.
They should advertise at LMU. College kids are the only ones who could put up with that location. Drop the rent to $3000 and they'll get 6 guys in to it.
wow, I wondered what happened to that place! I used to sit in traffic trying to get into MB and look at the crappy original house and wonder how people managed to live there. Then I saw the place up for sale and the start of construction. I barely had time to wonder which genius had a vision for the property. It reminded me of the $3.6M new construction on Hermosa's 16th street ( a big rental and party walk street) which has been on the market for more than a year now! (http://www.redfin.com/stingray/do/printable-listing?listing-id=1126451)
Immediately afterwards I gave up on California, moved to Seattle and bought a great place so I lost track.
Why would anyone pay that kind of rent when $5,000 will get you a great 2 or even 3 bedroon SFR on a walk street in Hermosa west of Hermosa Ave?
'Zacktly. There's also a nice-looking 3br SFR for rent on a nice south-end walkstreet, fully furnished with a nice patio, for $7,500. To the earlier post's point, I think $3k sounds more like it.....
11:22 AM
"Drop the rent to $3000 and they'll get 6 guys in to it."
Six guys with the Worst-Parking-Ever. :)
Actually can't you get a monthly permit to park in the El Porto lot?
that builder in hermsoa should be fined for excessive stapled on stone...$300/sq ft
That 45th Street location is not merely awful, it is scary. At least the prior house had a brick fireplace pointing toward the curve in the road to serve as protection from the speeders and drunks who occasionally were challenged by the curve in the road. The only worse location is that apartment building on Lincoln in Playa/Westchester that is almost built on top of the north LAX runway.
justme,
I used to live in that apartment complex in the early 90s. It's actually a pretty good location if you're single and travel for your job. I used to meet a lot of flight attendents who lived there in the pool/jacuzzi. Good times!
Westside Rentals has a soon to be completed DeVico home on 35th and Pacific for rent for an astonishing 9.5k a month. Has this house been for sale yet or or is it going straight to rental? Interesting.
Wow, 9:32 - I know that house, and that's amazing. They haven't had it on the market at all yet. Straight to rental – like straight to video?
Yep, should definitely have been a commercial development. There could have been a small retail or service biz on the ground floor and a few offices up top. It wouldn't have been premium, but I would definitely rather work there than live there. Or, a long time ago the City should have stepped up and bought it for monumentation.
It sucks seeing that huge MESS. There used to be such a cool little beach shack on that corner.
I don't know that anyone on this blog has any common sense. Create a commercial building on this site or designate it commercially zoned????!!! Parking, handicap access, etc.... did you ever think of those complex issues???!!!! Too much salt water in your bellies all you surfers. Why didn't the city buy the land and leave it empty... imagine an empty corner with trees or maybe a draught resistant garden or something super low maintenance with a tiny little "welcome to manhattan beach" sign? I don't know who is more wacked out, the guy who bought it and developed it or the complainers on this blog!
"Why didn't the city buy the land and leave it empty"
Newsflash: the city has $41M in the bank, and that number is dropping rapidly.
$400K bid
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