Los Angeles is a diverse rental market with unique neighborhoods and home types. You’ll find single-family homes in older, established neighborhoods as well as new construction gated communities. High-rise apartment buildings are as common as beach cottages and condos.
There are also high-end Los Angeles rental properties that attract tenants with money who want luxury, privacy, and space.
If you’re renting out your high-end Los Angeles property, you need to make sure you’re working with a property manager who has experience with these types of homes. The tenant pool will be different. The expectations will be higher.
Leasing and managing luxury properties requires a different approach than you might take when renting out other properties. Our team at Earnest Homes has a lot of experience leasing, managing, and maintaining luxury homes and high-end condos. We rent out sprawling estates and high rise units. Our portfolio includes penthouses and beach properties. We’re comfortable showing and managing homes in affluent neighborhoods.
This type of Los Angeles property management requires some nuance. We thought that we’d share some of what we’ve learned with you today, in case you find yourself renting out a high-end investment property.
Leasing High-End Los Angeles Properties
When you have a high-end home to rent, you know you’re dealing with a special property that requires a lot of care and attention to detail. You’re also attracting discerning and sophisticated tenants who don’t really think about themselves as tenants. You should consider them important clientele; as if you were running a business and they were your bets clients.
These clients are accustomed to the finer things. They have high expectations for service and you’ll likely need to provide some concierge services to meet their needs. Luckily, if they’re renting a high-end property, they can usually afford to pay for that extra care and level of service.
Something you should expect about the leasing process when we’re talking about high-end properties is that they may take longer to rent. There’s a big difference between renting out a luxury home for $15,000 a month and renting out a two-bedroom for $3,000 a month.
Fewer people in the Los Angeles rental market can afford a high-end home. You can work around this by doing more marketing. Make the marketing more strategic, too. Listing a high-end home on Zillow or HotPads doesn’t make much sense. Your property manager will know where these prospective tenants are looking. We can put together a listing and a marketing plan that makes sense.
Any properties that bring in more than $8,000 in rent every month should be listed on the Multiple Listing Service (MLS). Tenants with more means often have a real estate agent help them locate a home, and you’ll reach those agents on the MLS.
High-end tenants will almost always have agent representation. You should expect to pay a commission, and you’ll need a property manager to reach out to those agents and negotiate the amount.
It’s important that you respond to all inquiries. There will be fewer leads, so jump right on them, and don’t let any get past you.
Prepare to have multiple showings to the same prospects. Instead of a lot of people looking at the home once, you’ll have just a few people looking at it multiple times before they decide to move forward.
How to Screen Tenants for High-End Properties
Does it feel awkward to screen a tenant who wants to live in a high-end property?
It shouldn’t. You are moving tenants into an extremely valuable investment. You need to do the necessary due diligence to ensure they are who they claim they are.
Prepare for complex situations, however. A tenant renting a high-end property is unlikely to have a 9-5 job with pay stubs to verify their income. They are likely to be self-employed or living off other financial resources, so you’ll be looking at tax returns and bank statements.
When you’re screening, look for higher cash reserves. There’s a lot more financial responsibility with these rental properties. There are a lot of scams in the Los Angeles rental market, and some of them are pretty sophisticated.
- Check credit.
- Review bank statements and tax records.
- Conduct a lien search.
- Review assets.
You can ask for a sizeable security deposit. In California, an unfurnished property comes with a security deposit of up to two times the monthly rent. A tenant renting a high-end property needs to produce that kind of cash. You need to protect yourself against prospective property damage.
Maintaining High-End Rental Properties
Your high-end rental property will likely have more expensive appliances. The counters will be granite or marble and there’s likely to be delicate flooring throughout the home. Travertine needs care and so does real hardwood.
Window coverings and electronics and pools and saunas or Jacuzzis will all be common in these homes.
These systems and functions and amenities can be expensive to maintain. There will likely be repairs needed from time to time. Troubleshoot, and be ready. Make sure you have a list of vendors in place who can provide you with the best service and care.
The clients living in these properties have money. They probably have Type-A personalities. You would expect them to be calm during high pressure situations, but you can also expect them to want things done immediately. When it comes to repairs and replacements and maintenance issues, they’ll want things to be fixed right away.
Tenants looking to rent these properties are accustomed to niche things, and they will certainly expect to get their own way. You have to be professional and courteous. Remember that they have access to attorneys.
Your Rental Property is a Business
We are always reminding property owners that when you rent out a property, you’re really running a business.
This is especially true when you’re renting out a high-end home.
Think about how you will show up to meet with these tenants. Dress professionally, be well groomed, and be respectful. This is how you should present yourself to all tenants, but the difference in this case is that your renters agreeing to take the property might depend on how you look and act.
These tenants expect to be treated well. They’re paying more, and they believe they deserve it. As long as you remember these are special properties leased by special people, you will have an easy time renting out your Los Angeles property. If you would like some help with these types of homes, we have the experience that can provide the best quality assurance. Please contact us at Earnest Homes.