Q: "I have been looking to buy a place near the center of Provincetown. I do not have a car and don’t need parking. If I buy a place without parking, will that hurt me down the road when I go to sell?"
A: Many properties in Provincetown don’t have parking, particularly properties on the water and close to the denser downtown area. Many people, like you, do not have cars. If they come from Boston, they take the ferry, Cape Air or the bus. As you clearly realize, one can get along fine in Provincetown with a bicycle instead of a car.
If you are planning to rent your unit, parking does come in handy for tenants and it is an amenity that helps to attract renters. One option is to rent a space nearby on a seasonal basis and leave instructions and a parking pass in your unit for the renters. That way, you can compete with other rental properties that provide parking. Another option is to market your unit to people who don’t have cars. There are certainly a great number of tourists who come to town without cars.
How will your re-sale value be impacted if you don’t have parking? A parking space in Provincetown is worth about $20,000, give or take. The lack of parking will be figured into the re-sale price. Keep in mind that there will always be a buyer who is not concerned about the lack of parking.
Thursday, May 29, 2008
Thursday, May 22, 2008
Coolin' Off
Q: "I rent out my small west end studio to weekly renters to help with the mortgage. Should I provide an air conditioner?"
A: Thanks for your question. This is a common dilemma that many landlords ask themselves when renting their property out on a weekly basis. When offering your condominium or home for rent, especially to a vacationer, keep in mind that you should have most of the amenities a hotel, guesthouse or rental property has.
On Cape Cod, it is rare that we need air conditioning, however, it can get pretty stuffy in late July and August. Air conditioning can make the difference if a renter comes back.
You may want to provide a small window air conditioning unit that can be installed if the heat and humidity get unbearable. Your strategy may be to keep your air conditioner locked in a closet. In the event of a heat wave, have a cleaner or manager install it for you if you are not in town. A renter will appreciate the effort and could potentially re-book for next year. Retention and repeat business after all, should be your goal.
Be conscious of neighbors who may sleep with their windows open and enjoy sea breezes. Purchase energy efficient low profile air conditioners that are quiet.
Keeping the air conditioner in the closet also protects you. Renters are prone to running air conditioners when the weather is cool, when they are out or with the windows and doors open. This of course will leave you feeling chilled with a high electric bill.
A: Thanks for your question. This is a common dilemma that many landlords ask themselves when renting their property out on a weekly basis. When offering your condominium or home for rent, especially to a vacationer, keep in mind that you should have most of the amenities a hotel, guesthouse or rental property has.
On Cape Cod, it is rare that we need air conditioning, however, it can get pretty stuffy in late July and August. Air conditioning can make the difference if a renter comes back.
You may want to provide a small window air conditioning unit that can be installed if the heat and humidity get unbearable. Your strategy may be to keep your air conditioner locked in a closet. In the event of a heat wave, have a cleaner or manager install it for you if you are not in town. A renter will appreciate the effort and could potentially re-book for next year. Retention and repeat business after all, should be your goal.
Be conscious of neighbors who may sleep with their windows open and enjoy sea breezes. Purchase energy efficient low profile air conditioners that are quiet.
Keeping the air conditioner in the closet also protects you. Renters are prone to running air conditioners when the weather is cool, when they are out or with the windows and doors open. This of course will leave you feeling chilled with a high electric bill.
Thursday, May 15, 2008
Pre-Home Inspections for Sellers
Q: "I’d like to put my house on the market. I have been dragging my feet because I know it needs updating and I am nervous about what might come up when a buyer has a home inspection. I feel stuck. What should I do?"
A: Stop worrying and find out exactly what your property needs. Home inspections are typically done by Buyers but there is no reason that a Seller can’t hire a home inspector prior to listing his/her property. This can be very helpful in preparing your property for market. After the inspection, you will be given a report that outlines the repairs that your home needs. If you take care of these problems prior to listing, you will do yourself a big favor in simplifying the negotiations once you have an interested buyer. Issues that arise as a result of the Buyer’s home inspection can sometimes cost the Seller thousands of dollars, either in actual repairs or in credits toward the sale price. Why not pre-empt any contentious negotiations before they happen? You will have to spend some money up front, but getting your home inspected by a licensed Inspector prior to listing can save you lots of money in the long run.
A: Stop worrying and find out exactly what your property needs. Home inspections are typically done by Buyers but there is no reason that a Seller can’t hire a home inspector prior to listing his/her property. This can be very helpful in preparing your property for market. After the inspection, you will be given a report that outlines the repairs that your home needs. If you take care of these problems prior to listing, you will do yourself a big favor in simplifying the negotiations once you have an interested buyer. Issues that arise as a result of the Buyer’s home inspection can sometimes cost the Seller thousands of dollars, either in actual repairs or in credits toward the sale price. Why not pre-empt any contentious negotiations before they happen? You will have to spend some money up front, but getting your home inspected by a licensed Inspector prior to listing can save you lots of money in the long run.
Thursday, May 8, 2008
Saving Grace
Q: "Are there any laws, in the Commonwealth of Massachusetts that allow for a grace period in mortgage payments? Say for example, forgive a couple months payment prior to commencing foreclosure activities, provided the homeowner can prove and actually is pursuing remedies to the situation, e.g., selling the property, etc.?"
A: This is a common question these days.
Today in the immediate wake and occurrence of the mortgage meltdown the last thing a bank wants to do is foreclose on a house. The typical foreclosure will cost a bank around $50,000 when all is said and done. Many banks are negotiating new terms with their clients rather than foreclose. Call your bank and see if there is a way to renegotiate your mortgage. This is very common in today's market. Please note that some lenders will not negotiate new terms.
We are not aware of any laws that grant leniency to homeowners for unsatisfied or late mortgage payments. Again, the best place to start is your bank. Using a short sale could be a solution. A short sale is when the house sells for less than the mortgage. Right now, if your bank grants a short sale, one of two things happen: 1. You owe the bank the difference in a separate loan usually with a monthly payment similar to a car payment. 2. The bank forgives the difference, however, you will be exposed to a capital gains tax on the difference. Since the bank granted you this amount it is considered a gain.
You would best be served by calling your bank and asking them about renegotiating your terms. Tell them you are aggressively marketing your home for sale and will work with them to prevent foreclosure. Also, inquire about a short sale. This may be the remedy you need to lower the listed price on your property and compete realistically to produce a buyer. Beware though, some banks record a short sale balance as a negative on your credit.
A: This is a common question these days.
Today in the immediate wake and occurrence of the mortgage meltdown the last thing a bank wants to do is foreclose on a house. The typical foreclosure will cost a bank around $50,000 when all is said and done. Many banks are negotiating new terms with their clients rather than foreclose. Call your bank and see if there is a way to renegotiate your mortgage. This is very common in today's market. Please note that some lenders will not negotiate new terms.
We are not aware of any laws that grant leniency to homeowners for unsatisfied or late mortgage payments. Again, the best place to start is your bank. Using a short sale could be a solution. A short sale is when the house sells for less than the mortgage. Right now, if your bank grants a short sale, one of two things happen: 1. You owe the bank the difference in a separate loan usually with a monthly payment similar to a car payment. 2. The bank forgives the difference, however, you will be exposed to a capital gains tax on the difference. Since the bank granted you this amount it is considered a gain.
You would best be served by calling your bank and asking them about renegotiating your terms. Tell them you are aggressively marketing your home for sale and will work with them to prevent foreclosure. Also, inquire about a short sale. This may be the remedy you need to lower the listed price on your property and compete realistically to produce a buyer. Beware though, some banks record a short sale balance as a negative on your credit.
Thursday, May 1, 2008
Tax Break for Selling Your Home
Q: " I bought my house 8 years ago for $250,000. Since that time, the value of my property has tripled. I would like to sell my house and downsize. I have never sold a property before and I heard that I do not have to pay Capital Gains tax if I am selling my primary residence. Is this true?"
A: That is not entirely correct. The current tax law states that an individual is exempt from the first $250,000 of Capital Gains ($500,000 for a couple) on a property that you have lived in for at least two of the past five years. If your gain is larger than $250,000, you will likely be taxed on the excess amount.
To figure out your gain, you must first know your cost basis. That is the amount you paid for the property plus any improvements you have made. The difference between your sale price (minus your expenses of selling) and your cost basis is your gain.
In your case, if you spent more than $250,000 on improvements, then you will probably be exempt from Capital Gains taxes.
This tax break is a huge benefit for homeowners. Two bits of advice: 1- Always consult your accountant and your attorney before buying or selling real estate to understand all of the tax ramifications. 2 - Keep good records of all of your capital improvements in order to assist your accountant with the task of determining your basis when it’s time to sell.
A: That is not entirely correct. The current tax law states that an individual is exempt from the first $250,000 of Capital Gains ($500,000 for a couple) on a property that you have lived in for at least two of the past five years. If your gain is larger than $250,000, you will likely be taxed on the excess amount.
To figure out your gain, you must first know your cost basis. That is the amount you paid for the property plus any improvements you have made. The difference between your sale price (minus your expenses of selling) and your cost basis is your gain.
In your case, if you spent more than $250,000 on improvements, then you will probably be exempt from Capital Gains taxes.
This tax break is a huge benefit for homeowners. Two bits of advice: 1- Always consult your accountant and your attorney before buying or selling real estate to understand all of the tax ramifications. 2 - Keep good records of all of your capital improvements in order to assist your accountant with the task of determining your basis when it’s time to sell.
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