Mansions Go Rental in Lake Forest, Lake Bluff

There’s something surprising about the $4.99 million, 8,800 square foot French provincial mansion on the market at 1955 Telegraph Road in Lake Forest.

It’s not the nine full bathrooms, the lit front-yard fountain or the 15-by 17-foot walk-in closet that would dwarf most bedrooms.

The surprise is that for $23,000 per month, owner Adam Grabowski is willing to rent it.

The notion of renting out such a valuable home would have been unthinkable just few years ago.

“Absolutely not,” Grabowski said as to whether he would have considered renting the gated, 2.2 acre property if the market was good.

“Buyers are tougher to get right now, but renters are a little bit easier,” he said.

Rentals Fit Right Now for Future Buyers

Lingering malaise in home sales – particularly at the top end of the market -- has driven both prospective buyers and sellers to the sidelines waiting for rock bottom to appear. Meanwhile, future buyers still need a place to live and future sellers are looking for a way to generate revenue on properties that would otherwise sit idle.

“This thing will eventually turn around,” Grabowski said of home prices. “We basically want to buy some time and improve our cash flow.”

He’s not alone in that calculation, said Scott Lackie, president of area realty group Griffith, Grant and Lackie.

He said his group has done more rental transactions in the past year than in any of the previous 10 years.

Lake Forest and Lake Bluff, both overwhelming populated with owner-occupied properties, saw 206 home rental contracts written last year, according to Brad Andersen, also of Griffith, Grant and Lackie.

Sellers who have the financial wherewithal to try and ride out the rough market are doing so, hoping for a price rebound to recover lost equity. Some buyers, pleased with the continually downward price trajectory, are holding back hoping for even bigger bargains. Still others are holding off buying for reasons beyond their control: because they, too, are waiting for homes to sell, because financing has dried up, or because they did sell a home and lost so much money they don’t yet have a down payment.

Meanwhile, everyone still needs a place to live, and high-end rentals have been the solution for many on both sides of the equation.

Renters: Their Own Place Won't Sell

Angela and Peter Rode wanted to make a transition to the suburbs like so many before them: sell the condo in Chicago and buy a house in Lake Forest so their soon-to-be elementary-aged girls could go to the area's best schools.

But they ran into a snag at step one.

Their "spacious" and "cute" four-bedroom, three-bath place in Roscoe Village joined a glut of city condos that aren’t moving anywhere fast.

“The market in the city is terrible,” Angela said, waiting for her youngest, Madison, to make her way down the slide that came with their rented Lake Forest front yard.

Whilst in limbo, her agent, Suzie Hempstead, helped the family find a temporary home.

Agents receive a much smaller commission on rental contracts, but their work can earn them client loyalty and that bigger payday when renters become buyers again.

The Rodes were the winners among several eager bidders on the five-bedroom, three-and-a-half bath home just a three-block stroll from ice cream shop.

With that kind of location as an asset when prices do begin to rebound, Tim Shanahan decided to rent the property for $4,500 per month rather than decrease the price from the $1.145 million he was asking.

Shanahan said his own family loves that house and the only reason they moved into a bigger one across town was that a death in the family left him “long on Lake Forest properties.”

“A lot of our friends told us we were crazy when we told them we were going to rent it out,” he said.

“We had put a lot of money into faux finishes on the walls and custom drapes,” he said, “which is not the sort of thing you would do in a house you’re going to rent out.”

But there was such a clamor when it was listed he had no trouble finding a responsible family he trusts to take care of it.

The house is also near , he added, “and we knew we didn’t want six college kids moving in and splitting the rent.”

Perks to Rentals

Though it wasn't their original plan, Angela said her family loves being able to walk downtown and, because they negotiated snow removal and lawn service into the rental contract, it has been an unusually charmed, hassle-free suburban life.

They have held off making decorative changes they would have if the place were their own, but are happy with the arrangement and may inquire about renting another year there.

A search of rental homes on the market in Lake Forest turned up 14 priced at $4,500 or more per month.

Shanahan has been on both sides of the rental equation in Lake Forest and he can attest to the current luxury of choice.

In the spring of 2001, when his family was relocating from California, the properties on the market were nothing like the one he rented to the Rodes.

“Not even close,” he said, recalling that the best place he could find was to be torn down – and the owner seemed to keep it up with its future fate in mind.

Unlikely Renters

In addition to spawning some exceptional rental properties, the housing crisis has also made unlikely renters – at least temporarily -- out of long-time owners.

“The last time I rented a place I was 18 years old,” laughed Enza Turck, who is now 46 and renting a townhome in Conway with her husband, Chuck, and two teenage girls.

Despite having a wider selection of high-end rentals to choose from in the area, the Turcks decided to go smaller: about half as large as the 3,700 square foot home they left in Texas two years ago. The downsize would have caused their 13- and 16-year-old daughters to share a bedroom if the eldest, Gabriella, had not decided to swap her queen-sized bed for her sister's twin that would fit in the closet-less den. Her clothes share space with Jacquelin’s, which Enza said can sometimes present challenges.

The Turcks, who previously lived in Lake Forest, plan to buy a larger home here in the next few months, but decided to go frugal first after taking a bath on the house they sold in a ritzy Dallas suburb. The experience has been good for them all, Enza Turck said.

“I think a lot of people who were living past their means have learned a lesson, and I know we have,” she said. “Going through what we have in the past two years will really make us appreciate owning a home when we finally do move into one.”

In one pleasant surprise, in the time they’ve been renters, home prices have fallen further – well below she or her realtor, Lisa Trace, would have ever imagined.

 “I am stunned at some of the prices out there,” she said. “So in that respect, we’ll get more for our money than we would have.”