Not the buying kind

As lease properties go, 990 Hanley Ave. in Brentwood is far from a bargain: two bedrooms, one bath for $12,000 per month. Then again, the tree-shrouded, Modernist structure offers amenities a tract home can’t match: 2 acres of landscaped grounds, a one-bedroom guesthouse and the cocktail party perquisite of having been designed by esteemed Los Angeles architect A. Quincy Jones with Pasadena architect Whitney R. Smith.

But if one can afford monthly lease payments of $12,000 -- or even one-third that amount -- why not simply buy a home and reap the financial benefits of property appreciation and a mortgage interest tax deduction?

Perhaps because homeownership isn’t for everyone.

Leasing a single-family home or a condominium is preferable to many people who can afford to buy but choose not to. Some lessees, believing that Southern California housing prices have peaked, sell their homes and rent for a year or more, with the ultimate goal of buying once the market cools. Parents with school-age children may lease in a top-rated school district where homes are prohibitively expensive. Empty-nesters intent on downsizing may rent a condo or apartment to see how well they adjust to high-density living. And out-of-state transplants often lease before buying to gauge whether their new community suits their lifestyle.

Homeowners sometimes lease a second home, often for six to 12 months, to escape the cacophony of hammers and saws in their main abode. “We have people lease who are in the process of remodeling their house,” said Malibu-based Realtor Cliff Waeschle of Sotheby’s International Realty.

“We get the vacation people out here. They’ll rent for a month or for the whole summer,” Waeschle said. “We also have people who have sold their homes and want to live on the beach for a while -- try it out before they buy.”

Yet who in their right mind leases a home for $12,000 a month? The 990 Hanley residence has piqued the interest of several well-heeled house hunters, including a New York City couple who summer in L.A., an entrepreneur who’s launching a business in Culver City in November and a TV actor starting a new series this year, according to Mossler Deasy & Doe’s Erik Lerner, a Beverly Hills Realtor handling the listing.

Lessees who pay $8,000 or more a month often aren’t writing the rent check themselves. Instead, their employer is footing the bill. “They’re usually in a production, maybe a TV show,” said Coldwell Banker agent Jonathan Canter in Beverly Hills. Canter’s listings include a $15,000-per-month, three-bedroom home in Bel-Air and a $10,000-per-month condominium on the 29th floor of the Sierra Towers on Doheny Road in West Hollywood.

Not all lessees are out-of-state transplants in need of immediate housing. Beverly Hills resident Jay Shecter and his wife lease because it frees them from “all of the nuisance issues surrounding owning a house,” he said. Those annoyances include maintenance and upgrade expenses, property taxes, homeowner’s insurance and, Shecter said, “worrying when you go away on a trip.”

Others are motivated by the belief that Southern California’s sizzling real estate market has finally peaked after several years of double-digit appreciation. By selling their homes and leasing for six months to a year, they plan to be in position to buy again once prices fall.

“We sold our house in Calabasas to take advantage of the booming market,” said Allen Klevens, who made $925,000 after selling his three-bedroom home this year. He’s leasing a home in nearby West Hills with his wife and two preschool-age children.

“We’re only going to be renting for a year at the most,” said Klevens, who added that his family may “take the money and run” to Seattle or stay in Southern California and buy another home. “It’s just a matter of letting the market cool off a little bit.”

Real estate professionals warn, however, that market timing is a risky business. If home prices continue to climb, the lease-and-wait crowd may end up paying more for a home by sitting on the sidelines.

“I’ve talked to a couple of people who have sold their houses and are leasing with the intention of riding the sale market down,” Lerner said. “But as inflated as the market is, I don’t believe you can time it.”

And lease-to-own plans aren’t popular in the current residential market, according to California Assn. of Realtors’ President Ann Pettijohn. “Maybe when interest rates are high, somebody will lease with an option to buy,” she said, “but we’re not seeing a lot of that.

“When people can’t sell their house, they’ll lease it to somebody,” Pettijohn said. “But in the market we’ve had lately, why would you delay the sale of your house and lease it?”

Renting appeals to many empty-nesters, particularly retirees who sell their homes and lease smaller units, such as a condo or apartment, to see how well they adjust to tighter living spaces and shared walls.

Leasing is also an option for parents who can’t afford to buy homes in an affluent neighborhood with good public schools. “I’ve got two ladies right now who would buy. They want a good school district but can’t get a three-bedroom house for $500,000,” said Coldwell Banker Realtor Chloe Brott in San Marino, a community south of Pasadena where the median home price is more than $900,000.

Leasing a home in a good school district “almost ends up being cheaper than tuition at a private school,” said Pasadena Realtor Maggie Navarro, who once leased her condo to parents of school-age children. “They wanted to be in the South Pasadena school district.”

The residential lease market isn’t exactly booming right now, according to many Southern California real estate agents. “The lease market, at least at the high end, has not been that great,” said Beverly Hills agent Canter, whose rental listings range from a $2,175-a-month townhouse in Hollywood to the aforementioned home renting for $15,000 a month in Bel-Air.

Agents in Pasadena, Westwood, Inglewood and the San Fernando Valley echoed Canter’s sentiments, a factor attributed mostly to the lack of housing inventory in a tight market.

“The lease market has been kind of soft in Pasadena,” said Navarro, who believes that -- excluding the school motivation -- rentals are often a poor choice, particularly for anyone who can afford to buy a house. “Your payment for a mediocre two-bedroom rental is around $2,100 a month. You can borrow a lot of money for $2,100 a month and get a tax write-off for it.”

Of course, people frequently rent or lease a residence because they can’t afford to buy. Only 19% of the state’s households were able afford a median-priced home at $465,160, according to the California Assn. of Realtors’ housing affordability index of May 2004.

But many of those who can afford to buy still view leasing as their most worry-free option. “It’s a major relief not to be faced with the responsibility of homeownership,” said Beverly Hills lessee Shecter.

Jeff Bertolucci can be reached at jbert@aol.com.