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Tag: Anna Maria Island real estate

Castles in the Sand

Selling your home – it should show like a model

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Every year around this time I try and remind homeowners what potential buyers are looking for. Even though our market remains brisk, we are on the brink of the busy selling season, which will get in full swing as more and more visitors return to the Island with an eye to purchasing their paradise home.

Let’s start with the old chestnuts of getting your house ready for sale. Since cleanliness is next to you-know-what, every inch of your house needs to be spotless. On an island where there are more sand and salt than the average Northerner sees in a lifetime, it’s always a challenge to get it out of our homes and off our windows. But out it must go; not a speck of sand on the floors and not a grain of salt on any of the glass.

Island living also means that mold grows on any damp surface faster than McDonald’s cranks out Big Macs. Scrutinize every inch of bathrooms, kitchens, grout and outdoor furniture looking for mold or the beginning of mold. Remember mold and dampness smell. You don’t want your home smelling like a high school locker room.

Clear off countertops in the kitchen and bathrooms, especially if you have really nice hard surface ones. Organize and declutter closets, the kid’s toys and the laundry room. If you’re lucky enough to have a garage, clean it out to make room for an actual vehicle, not just bikes, lawnmowers and old paint cans.

You also might consider storing away any collectibles you may have on display, including family photos that could become a distraction to buyers touring your home. The object is to make everything look larger than it might really be and keeping the buyer’s eye on the ball, not your daughter’s wedding.

Make sure all systems like heat and air conditioning and appliances are in working order and there is no peeling paint. When buyers pull up to your home, they want a reason to get out of the car, so give them one. Make sure there’s nice landscaping, the weeds are pulled and walkways cleared. How about another old chestnut, painting the front door a jazzy color. They say red is good luck.

You can’t totally remake your property before sale, but you can keep it as neutral as possible.

A little paint goes a long way, so consider painting some of the walls where needed in a light gray color, which is very much in vogue right now. Even removing some heavy dark furniture will give a feeling of more space, as well as a lighter, more open impression.

You may not be able to create high ceilings overnight, but you can make sure the ceilings don’t have any cobwebs dangling from them. And in a hurricane-prone area like ours, owning a generator that can be passed on to a new owner could be just the right touch.

Finally, anything just a little off about your property could raise a red flag to buyers who may already be guarded during their house hunting experience. Don’t make them think that you’re not a responsible homeowner because you missed something as minor as a cracked bathroom tile or broken doorknob.

If you’re putting your property on the market this season, good luck. Everything is pointing to the Island being busy and the real estate market being equally busy. Let the sun shine through those windows.

More Castles in the Sand:

Sunshine State population growth

2019 tax nightmare

Is a piece better than the whole pie?

Castles in the Sand

Is a piece better than the whole pie?

Written by Louise Bolger on . Posted in Archives.

A very long time ago in the history of writing this column, I discovered fractional ownership as a new and interesting real estate topic. I quickly dropped the subject when I realized it wasn’t something that had caught on in great numbers across the vacation real estate industry. Well, recently there was an extensive piece in The Wall Street Journal about fractional ownership which sparked my interest again, so I took another look.

As all of us who live in Florida, and certainly on Anna Maria Island, know, second homes are the ultimate discretionary purchase. Many people would like to have one but no one really needs one. Therefore, it would appear that fractional ownership arrangements would be the perfect fit for potential second homeowners. But are they and how do they compare to timeshares?

Timeshares and fractional ownerships are very similar in that they can be sold, gifted or inherited, and require annual maintenance fees. Fractional owners receive a real property deed whereas timeshare owners receive a type of deed but specifically for an assigned period of time, usually one or two weeks. In addition, fractional properties are usually organized into residence clubs, which appeal to more upscale buyers with higher prices, nicer amenities and fewer owners than timeshares, making the concept as well as the properties more exclusive. But be careful. The more fractions that are sold, the more they resemble timeshares.

Also, proponents of fractional properties point out that a purchase of a fractional property can be arranged for much longer periods of time, creating more of a second home concept instead of just a vacation getaway. In addition, the case can be made that fractional ownership provides equity benefits with more of the possibility of making a profit when it’s sold, but like all real estate, there are no guarantees. Although timeshares can appreciate in value, depending on the property and location, typically they do not. Of course, conventional financing for both fractional ownerships and timeshares is near to impossible.  Purchases are generally made with cash.

So, who are the buyers of fractional ownership? They are generally people who can afford a vacation home but don’t have the time to use it on an annual basis and just want a winter or summer getaway. Or, as the Wall Street Journal piece pointed out, they may be people who want to spend months hopping from one fractional to another around the globe.

Although there are fractional ownership properties in Florida, I couldn’t find any on Anna Maria Island. Two of the big players in fractional ownership clubs are Timbers Resorts and Elite Destinations. There is also the Luxury Fractional Guide online to check out if anyone is interested in further research, and you should do your research. Since fractional ownership clubs make their money on selling the properties and reselling the properties, it’s important to verify that their maintenance program is well funded and well managed.

The fractional ownership concept makes me a little uneasy, but for owners who want a property in an area with escalating property values, it may be the only way to spend time there for more than just a quick visit. While I was doing my research, I found that Cabo San Lucas, Mexico, had several fractional ownership clubs. It just so happens that I’m headed there at the end of the month. What are the chances of me coming back with a new deeded property? I don’t think so; I want all of the pie.

More Castles in the Sand:

2019 real estate trends

Red tide, hurricanes and interest rates

No Christmas gifts for foreign buyers

Castles in the Sand

2019 real estate trends

Written by Louise Bolger on . Posted in Archives.

Every profession has its experts and every expert has their expert advice for the future. Sometimes they’re right, sometimes they’re wrong, and sometimes they wish they’d never gotten out of bed. Have you seen the stock market? Nevertheless, the experts still keep on coming, and for the 2019 real estate market, I found a couple for you.

Forbes.com is a wealth of information about any business venue. It will even tell you the net worth of celebrities – Steven Spielberg, $3.7 billion and Oprah Winfrey, $2.8 billion. But what they are really good at is predicting the future or as it calls it, future trends.

For the 2019 real estate market, it talks a lot about the Millennials, which are the largest segment of buyers. Forty-five percent of new mortgages will be applied for by millennials vs. 17 percent by boomers. In 2020, when the Millennials turn 30, Forbes pushes that buying trend up even further and is predicting a good real estate year. This year, however, Forbes says it will be a slow real estate year which could be good long-term since the demographics (millennials) will support the demand. This is expert talk.

It also feels that first time buyers will be looking at condos and lower end vacation homes.

These properties are less expensive, which will make them, more affordable in view of raising interest rates, again talking about Millennials.

On another note, Forbes is recommending purchasing property in the Bahamas, which after being hit by several hurricanes is just starting to rebuild. Waterfront property there is 10 cents on the dollar compared to waterfront property in Florida and only a 20-minute flight.

Realtor.com has two shocking forecasts. The first one is that mortgage interest rates will hit 5.5 percent by the end of the year, and the second is that the market will remain a sellers’ market. Sellers can glow over this, but the buyers aren’t going to cave in to any price sellers are asking, so sellers are going to have a little tough going.

Not tough going, however, are Manatee County’s November sales statistics taken from the Realtor Association of Sarasota and Manatee’s website.

Single-family homes closed 7.6 percent more properties than last November, and condo’s closed 12.9 percent more. The median sale price (half above and half below) for single-family homes was up 8.5 percent to $313,496 from last November. Condo sales were also up 2.0 percent to $186,500 from last November. The average sale price for single-family homes is up 4.9 percent to $379,982, and the condo average sale price is up 1.4 percent to $255,619. The median time to sell for single family and condos are all between 90 and 95 days, and the month’s supply on the market is staying about four months for all housing sectors.

The big news for November is that our neighbor Sarasota has finally broken into the $300,000 price point for the median sale price, increasing 5.3 percent from last year. Manatee County has achieved this several times this year but this is the first time Sarasota has.

Our numbers are looking good compared to Florida statewide results. The median sale price for single-family homes was $255,000, up 6.3 percent, and the median sale price for condos was $185,000, up 5.1 percent. These numbers are reported by the Florida Realtors Research Department.

Are our future lives being dictated by 30-year-old Millennials? Something tells me yes, they are. As long as they keep the real estate market flowing, it’s OK by me, and that’s my prediction.

More Castles in the Sand:

Red tide, hurricanes and interest rates

No Christmas gifts for foreign buyers

Tax overhaul saved one thing

Castles in the Sand

Red tide, hurricanes and interest rates

Written by Louise Bolger on . Posted in Uncategorized.

It’s been a strange year and a few months for real estate. Irma took a toll, although not a devastating one, but enough for us and prospective buyers to sit up and take notice. Then the red tide rolled into town and took its time leaving, with traces still floating around, and then interest rates went up, putting a damper on the housing market nationally and the potential that it could trickle down to us. In spite of, this Anna Maria Island still keeps moving forward with selling prices holding and buyers still looking.

Since everyone in real estate, homeowners and professionals alike, are always interested in the upper end of the market, it’s time to do an analysis of $1 million and over sales and listings for residential properties including condos and vacant land. We’ll take a look at July, August, September and October. The closed property numbers are from the Manatee County Property Appraisers Office and the available or pending properties as of this writing are from realtor.com.

Cortez had two properties close over $1 million; last time this tiny area didn’t have any. The city of Anna Maria had 17 properties $1 million or over close during these months ranging from $1,000,000 to $2,500,000; during the previous analysis, there were nine. The combined cities of Holmes Beach and Bradenton Beach had 14 over $1 million closings during these months, ranging from $1,100,000 to $5,000,000. In the previous analysis, there were 19 sales.

As far as currently on the market or pending, Cortez has five, ranging from $1,099,900 to $1,500,000, which is a waterfront lot. During the previous analysis, there were four properties in this price range. The city of Anna Maria currently has 51 properties over $1 million, ranging from $1,049,000 to $5,200,000. Of these, two are over $3 million, and two are over $4 million. Last time, Anna Maria had 64 properties listed at $1 million or more.

And the combined cities of Holmes Beach and Bradenton Beach have 68 properties currently listed over $1 million, ranging from $1,000,000 to $7,775,000, which is a large waterfront parcel of land. Of these, two are over $3 million, three are $4 million or over and one is over $5 million. Last time these cities had 77 properties available in this price range.

Although not exact, the numbers are fairly consistent. Much of the country is experiencing a slowdown of the real estate market because of the lack of inventory driving up prices but resulting in lower sales. We too see that in our marketplace, but we also have the additional element of a reputation for hurricanes and the persistent red tide, which is getting a lot of media publicity around the country. Now that we’re getting into the busy selling season, we should have a clearer idea of the availability of buyers.

I was on Palm Beach Island for a weekend a few weeks ago, and $1 million properties don’t even exist on that island. But on this Island, we have plenty, and, hopefully, that trend will continue into the new year.

Wishing everyone a peaceful and merry holiday.

More Castles in the Sand:

No Christmas gifts for foreign buyers

Tax overhaul saved one thing

Anticipating condo special assessments

Castles in the Sand

No Christmas gifts for foreign buyers

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Almost a year ago, I wrote a column about the proliferation of buyers from other countries coming into the state of Florida. Florida at that time was the national leader for international buyers at 22 percent of all international buyers in the United States. But there are many foreign countries that either prohibit foreign buyers or levy additional taxes to discourage them. These are a few:

New Zealand, in particular, has taken a hard stance on foreign buyers in an effort to make homes more affordable for its citizens. It recently passed legislation to limit foreign buyers to buying only newly built homes, and only 60 percent of units in new apartment buildings can be owned by foreign buyers.

New Zealand’s neighbor Australia has also increased the tax burden on new homes, introducing a buying tax and raising its stamp tax to 8 percent. This is in addition to annual fees for foreign owners.

Property values in the United Kingdom have been very hot, especially in London in recent years. To help cool off the market, the U.K. has added a 3 percent surcharge on the stamp tax paid by second home buyers and a 15 percent buying tax on all homes bought through a shell company. This was a previous technique frequently used by foreign buyers, which has resulted in prices falling substantially in London.

Hong Kong also has a tax stamp fee of 15 percent for foreign buyers and has extended that to include all second-home buyers as well. And Switzerland, which always has discouraged foreign ownership of property, now requires a permit to purchase property with a limit of 1,500 permits a year. There is an exception for EU buyers who have permanent homes in Switzerland. Even Mexico will technically not allow foreign buyers to purchase property within 31 miles of the coast or 62 miles of the U.S. border. There are, however, ways to get around this by having local banks hold title to the property. But there is still hope for foreign buyers who want to purchase exotic properties. The Maldives in the Indian Ocean and Thailand will be glad to take your money.

To my knowledge, I don’t believe the United States government has placed any restrictions on foreign buyers entering our real estate market. Aside from a tax ID number, foreign buyers do not have to be U.S. citizens, do not need a green card and do not require a special visa. As long as they have the cash or can obtain satisfactory financing, they are pretty much free to buy whatever and where ever they want.

The onus is on the lenders to qualify the buyer’s finances, visas and legal right to be in the country to protect their investment from buyers who suddenly leave the country with the bank becoming responsible for the property. However, almost half of property purchases by foreign nationals are made in cash, 44 percent at last count.

Foreign buyers may be boxed out of purchasing real estate in some countries in an effort to keep their real estate prices from becoming overinflated, harming their own citizens. Fortunately, the United States is a big wealthy country and will not be seriously impacted by an influx of foreign buyers. That said, there are areas of Florida, particularly on the east coast, where foreign buyers have some responsibility in running up property values.

We love real estate buyers no matter where they’re from. Tell Mexico and Australia and Switzerland and all the others to send them to us. We’ll make sure they have a merry Christmas.

More Castles in the Sand:

Tax overhaul saved one thing

Anticipating condo special assessments

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Castles in the Sand

Tax overhaul saved one thing

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

It’s the holiday season and time to concentrate on family, friends and good cheer for all. There’s also one more thing that starts working its way into the deeper recesses of our brains in December – taxes.

Last year’s substantial tax overhaul resulted in a lot of people being not too happy, especially property owners. Caps on mortgage interest and local and state property taxes have homeowners and investors holding their breath waiting to see what their 2018 tax returns are going to look like. However, one of the favorite tax breaks for investors was not touched and that’s the 1031 Exchanges.

A 1031 Exchange allows you to exchange or reinvest proceeds from your original property and defer the capital gains on the profits from the sale. The exchange only applies to properties held for business or investment, therefore, your personal and primary residence is not eligible for the benefits of the exchange.

Prior to the tax overhaul properties could be exchanged for like-kind properties, which included all real property including artwork and valuable collectibles. Now, however, that part of the law has been amended to allow for only real estate to be recognized as an exchange.

Although the 1031 Exchange benefits big investors, it also can be an advantage for small investors and second home and vacation homeowners who take the time to establish their property as a rental income producing property. It’s possible to trade up your vacation home to a larger one by converting your second home from personal to business use by renting it for a specific number of days for at least two consecutive years. This is a nice way to defer the capital gains on your vacation property, which typically does not qualify for a capital gains exemption since it’s not your primary home, while still giving you the ability to purchase a larger home for your family.

There are certain criteria you have to meet to qualify for the exchange. You have 45 days from the date of the sale of the old property to identify potential replacement properties. In addition, you must acquire the new property no later than 180 days after the sale. It sounds a little complicated, but individuals use this tax break successfully multiple times and just keep rolling over the capital gains into another property. This can also be used to preserve wealth invested in real estate, which is a little more complicated.

As with any tax questions and changes, you need a competent CPA and/or tax attorney to review your particular situation before undertaking this process. And remember, your primary home is not eligible for an exchange and is subject to and also benefits from a whole different set of IRS regulations. Certainly, I have no way of knowing if 1031 Exchanges are used for investment properties and second homes on Anna Maria Island, but my guess is that the Island and its ever-increasing property values is prime for one of the IRS’s most popular exemptions.

So, while you’re sipping the eggnog and wrapping gifts, start thinking about April 15.  If you plan ahead, Santa may leave you a very substantial gift in your stocking in a couple of years. Now that’s what I call a stocking stuffer.

More Castles in the Sand:

Anticipating condo special assessments

So, you want to be a real estate investor

Before you sell, become a home historian

Castles in the Sand

Anticipating condo special assessments

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Owning property is nothing short of waiting for the unexpected to happen. Whether you own a single-family home or live in a condominium community, you can be sure that eventually, you will have to make a major repair involving major money. The only difference is how those repairs will be funded.

When you own your own home and the roof needs to be replaced, it’s your financial responsibility. When you live in a condo community, it’s still your responsibility only it’s administered differently. Hopefully, your homeowners’ association will have anticipated major repairs and will have funded these and other expenses accordingly, however, if they didn’t, get ready for a special assessment.

Special assessments are designed so that condominium boards can pay for unanticipated expenses they don’t have the money for. These are one-time payments that can be a lump sum or spread out over a specified period of time. Once the purpose of these additional funds is met, the special assessment ends, and if there is money that was collected from the owners, it cannot be used for any other purpose and must be refunded.

Condo boards have the ability to pass a special assessment as they see fit without the majority vote of owners. Owners must, of course, be notified of a scheduled vote and the purpose of the assessment. Typically, owners know well in advance of an upcoming assessment since these matters are discussed in prior board meetings with the full knowledge of owners and a full explanation from the board of why this is necessary. Frequently boards will decide if it is more advantageous to borrow the money for the repairs and use the special assessment to repay the loan.

Another type of special assessment that many condo associations in Manatee County experienced last year was a special assessment for hurricane damage. Just like single-family homes, condo associations have a hurricane deductible as part of their insurance policies. If the association requires repairs after a hurricane, as many experienced with Irma, that are not covered because of the hurricane deductible, the owners will likely be billed for a special assessment to cover these repairs.

However, most homeowners’ insurance policies for condos have loss assessment coverage to reimburse owners for assessments levied on them for hurricane damage. Loss assessment coverage by Florida law is a minimum of $2,000, and some insurance companies have a $250 deductible from that amount.

It is particularly important for anyone who is considering the purchase of a condominium to inquire about the financials of the association. Ask if the association is fully funded, meaning that it has anticipated future repairs and is funding this amount from regular dues payments. If you have an accepted offer and contract on the purchase of a condo, you will be provided with the financials of the association and have time to understand how healthy the association is financially. Also, be sure to ask for a list of recent special assessments and their purpose. Naturally, older condo communities will face more maintenance issues, and you want to be sure that the board has recognized and planned for these events.

Expect the unexpected when you own any kind of property because for sure it will happen. Just because you own a condominium, don’t think that everything is automatically taken care of. It’s your responsibility before you purchase to understand and feel comfortable with the way funds are disbursed within a homeowners’ association.

More Castles in the Sand

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Castles in the Sand

So, you want to be a real estate investor

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

There’s only one thing trickier than real estate investing and that’s – well come to think of it there isn’t anything trickier. When it comes to navigating the ins and outs of real estate investing there is so much to learn that pulling a rabbit out of a hat seems like child’s play.

There is a saying that true real estate wealth is based on cash flow and that’s what investors, especially first-time investors, should aim for. Generating cash flow in a good, stable rental is more dependable than counting on a quick flip and appreciation.

If you’re purchasing a property that needs work first determine if the improvements are for the purpose of renting or flipping. Obviously, rental property can be improved with simpler and lower end finishes. If you are buying to resell, check out comparable properties for sale in the area and see what type of finishes are being offered.

The three most important factors when purchasing investment property is the cost to buy, the cost of improvements and how much you can sell or rent for after you renovate. Essentially, don’t over improve.

Determine the existing leases in place for rental properties and how that works for you. Go to the city departments to make sure there are not any road changes or new developments that can decrease the value of the property down the road.

Don’t be afraid to ask for help. Finding someone you trust could be the difference between a successful purchase and a disaster. Interview property managers and real estate agents who are active in the area, but don’t use their input to make a final decision.

Be realistic when calculating your financials and value your personal time in maintenance and paperwork. There are always unforeseen costs when tackling a renovation – taxes and loss of a tenant or a sudden downturn in the market can really set you back. Also, be careful when screening tenants. Do a credit check and get references, if necessary. Start small and make sure you can pay the mortgage on your investment should you find yourself in that position.

Careful with neighborhoods that are transforming, it may or may not happen. Learn the market as thoroughly as you can but it may be best to leave the more exotic purchases to experienced investors who can tolerate a downturn.

Set a targeted budget for your purchase and don’t get off track. Remember this is a business, don’t let your emotions rule your good sense. Education is the best way to keep emotions in check. Probably the most important thing and the one that first-time investors always forget is to stick to your principles and don’t overbid to prove you know what you’re doing. Know when to pass and keep searching without any emotional attachment to what you lost.

All real estate is local and that may be the best advice, especially for a new investor. Again, don’t make your decision based on the home you would like to live in and forget about the potential for profit. It’s easy to confuse where you would live personally to where you should invest.

There’s no real trick to becoming a real estate investor, no rabbits to pull out of a hat and no ladies to be cut in half. The real trick is pretty straightforward: know the market and don’t let emotions get in the way. Good Luck.

More Castles in the Sand:

Before you sell, become a home historian

Real estate sales can require scary disclosures

Florence – another wake-up call

Castles in the Sand

Before you sell, become a home historian

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Last week was Halloween, and we talked about disclosing everything, even if not required by law, that might be negative about your home to prospective buyers. What may seem ridiculous to you, like spirits real or not, deaths in the property or other than conventional activities, could be a hot button to a buyer. But do you know everything about your home, the good, the bad and the ugly? Putting your property on the market is the perfect time to delve into your home’s history and a unique marketing tool.

The state of Florida is not known for many historic homes like New York and Boston, dating back to the founding of the country, and even though there were settlements in Florida going back to the Spanish, not too many actual homes have survived compared to the northeast. Bradenton has some beautiful older homes downtown, as do other cities around the state like Jacksonville and St. Augustine, but it doesn’t matter if your home or the home you’re considering purchasing is 100 years old or 20, don’t you want to know its history?

There are professional house historians willing to do research, particularly on older homes dating back to years before records were efficiently kept. They will research public records, church records, history books and even do interviews with local residents who may be familiar with the property. This service, of course, is provided for a hefty fee and results in a nice book full of information for the owners and future owners.

I love the concept and feel that even if your house was built in more recent years, there may still be information about it you don’t know. For instance, who was the architect who designed the house, are the original drawings still on file, and what are the names of the previous owners, an answer which could surprise you, especially in a second home beach area like Anna Maria.

Wouldn’t you just love to know if famous people visited the Island and stayed in your house, such as actors or political personalities? We already know that professional ball players and circus performers came to Anna Maria, maybe they stayed in your home. The possibilities are endless, especially if you can find just the precise person who has been around long enough to point you in the right direction.

A search of the town records would also give you structural information about the home. Were permits pulled to repair damage that could have been from fire or flooding or pest infestation? Did a major hurricane occur in the early years of the home and are there any survivors from that event still around to interview?

You might want to include pre-renovation photos from the time you owned the property, pictures of some things unique to your house like the wall showing how your children grew through the years or a picture from your daughter’s wedding in the yard. Include dates of significant storms and if you evacuated and to where. Brief introductions to current neighbors and some history on the surrounding homes would be a nice touch.

Not only is a history book a great way to introduce potential buyers to your home, but it’s also a wonderful gift to new owners to pass down to future owners. It shows the love you have for your home and keeps the story of the house alive.

Every house has a compelling story to tell, and every room within the house represents a life lived. Make your house one for the history books.

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