REAL ESTATE

(Page 2 of 8)

They are basically sophisticated enough to sell their homes instead of losing them if they can't make the mortgage payments—unlike their financially and credit-challenged sub-prime mortgage compatriots in other parts of the country who are already losing their homes after falling prey to ethically challenged (if not yet legally criminal) lenders. (Just as an aside, some investors are active locally in buying up defaulted properties.)

"Historically, paying cash for $10 million and $25 million homes was a statement to your peers and your neighbors. Now it's all about the cost of funds instead of needing leverage to buy," says local mortgage executive Jamie Whitall.

One of Whitall's biggest mortgage deals was for a total of $12 million: a $9 million mortgage to help someone buy a $20 million property combined with a $3 million mortgage to help fix it up.

Many brokers attest that those who take out hefty mortgages can help pay for them by renting out their East End homes in the summer months. (Sometimes, homeowners even use some of the money they get from summer renters to traipse around Europe's French Riveria and Amalfi Coast.)

It's not just the high-end rentals, but any home that can bring in big bucks if rented during the summer months. A high-enough take in July and August can pay for a whole year's expenses, as renters are responsible for paying all house-related bills, from the gardener to garbage disposal, heat and air-conditioning.

"The Hamptons and Aspen are the only places in the country where you can pay a year's worth of expenses by renting your home for two months," says power broker Dolly Lenz of Prudential Douglas Elliman.

Why Own When You Can Rent?
Just look at Captain's Neck Lane, in Southampton's tony estate district.