If you're reading this, you've already decided that buying a multi-family home instead of a single family or a condo is at least an option, if not a necessity. Therefore I won't go into the benefits of a 2-3 family over a single or a condo.

Since rental income is the primary reason to buy a multi-family home, you need to think about features that make your apartments easy to rent. You can remodel and modernize the apartments. You should look for a property that has the features you CAN'T control.

1. Proximity to public transportation & stores: Since many of your prospective tenants may not have a car, your multi-family should not be more than 3 blocks away from these amenities. When I lived in a multi-family home, I frequently left the car home walked to the stores or took public transportation.

2. Size of the apartments: More importantly, the size of the rooms. It's better to have fewer large rooms than many small ones. A 3 bedroom apartment where all the bedrooms are only big enough for a twin bed will be harder to rent than a 2 bedroom apartment where you can fit a queen bed.

3. Layout: Do you have to go through one bedroom to get to another? If so, that's not a real bedroom, it's a captive room, best used as an office. It's better if the bathroom is near the bedrooms than off the kitchen.

4. Storage/ laundry space: An apartment is more rentable if it has larger closets, front or back porches where you can stash a bike, skis, etc. and at least a hookup for a washer/dryer either in the apartment or in the basement. If you already have a large basement, your apartments will be more rentable if your tenants don't have to go to a laundromat and if they have designated storage areas to put stuff they don't use every day.

5. Charm & Character: Many owners of multi-family homes do convert their apartments to condominiums. Do the apartments have nice oak floors? natural woodwork? natural light? walk-out porches? Does each apartment have access to the basement? All of these will make them mor saleable as condominiums if you do decide to convert in the future.

6. Yard Space: It's wonderful if the multi-family home has a yard, but it's not as important to your tenants as it is to an owner of a single family home. Tenants don't use the yard as much as a homeowner might, they're certainly not going to do much gardening, and you the owner will have to keep the yard looking good. A small back yard is useful in the winter as a place to put the snow from the driveway.

The ranch style home is a single story home with a long, low roof-line, open floor plan and long overhanging eaves.

It's a style often associated with tract housing and very popular during the population boom from the 1940s to 1970s.

The features that made it popular were an open floor plan where the ktichen opened to the dining room and living room; flexibility of design where the kitchen could be enlarged into the diningroom and the formal livingroom could serve as a family room. Sliders were incorporated so you could easily go outside to a patio or deck. If the house had a basement, it was large and sometimes designed to open directly to the back yard. Since the bedrooms were on the same level as the other rooms, anyone who found it dificult to climb stairs preferrred the ranch style. The long overhanging eves also afforded some protection from the rain while you stood by the front door searching for your house keys.

In recent years, the ranch style has been criticized as lacking style, being too sterile and utilitarian. Some buyers prefer having their bedrooms on the second floor. Because all the living space was on one story, the footprint of the house was larger than that of a cape or colonial, limiting the number of homes a builder could build on a development. Since the footprint was larger, a basement/foundation required a lot more concrete as well. For all of these reasons there are very few ranches being built except for custom homes in MA.

If you are looking for a home, don't overlook the ranch style home. Within the same neighborhoods and with the same living area, a ranch home usually has a lower asking price than a colonial. While it's true that ranch homes have no easily expandable attic, if they have a basement, the basement will be larger than that of a colonial within the same price range. Finishing the basement of a ranch will come close to doubling the total living area!

The basement can be remodeled into a family room or a private suite. Wouldn't you rather watch the Superbowl in a basement family room than in a finished attic? If a family member needs to live with you, wouldn't they be better off in a basement suite with private entrance than a finished attic suite?

The cape style home originated in New England and is typically a one or one and a half story home with a steeply pitched roof.

If the second floor (or attic) is finished, the rooms might only have windows at the end gables or have dormers in the front and back. Due to the steep pitch of the roof, the head room in the second story is limited unless the seconde story is modified with aat least 1 shed dormer running the length of the house.

Many cape style homes were built in MA after 1945 for returning war veterans. The starter home typically had 2 bedrooms on the first floor and an unfinished, walk-up attic which the builder could finish at an additional cost or the buyer could finish sometime in the future.

I still see capes from time to time where the second story was never finished, and this represents an opportunity for a buyer to add value and living space at their convenience and within their budget. 

1.  Federal deficit:  As the deficit problems loom, the administration rightly goes looking for places to find more cash to put on the books. In 2010, we saw some talk about big reductions in the mortgage-interest deduction – one of the most often talked about incentives for buying a home, and also a big cash cow for potential tax revenue if reduced or eliminated altogether. This type of change will not happen quietly nor without a fight. But I'm guessing we will see more discussion as Congress looks for ways to fix our budget woes.

2.  Jobs:  Yes, this is obvious, but it is worth mentioning yet again. Without a solid job outlook, housing markets will suffer. It's difficult to sign for a mortgage when you're unsure of your job security or worse – unemployed! Any good news on the job front will bode well for real estate markets so watch this issue closely for clues.

3.  Lending regulations:  One of the first things on the agenda this year is to look at how to restructure Fannie Mae and Freddie Mac. Regulators are also looking at rules about how banks must retain some of the risk when selling off mortgage-backed securities.

4.  Other administrative tactics:  Think Home Buyer Tax Credit. Will the administration step in and try to create another incentive program to boost sales? Will it try to incite banks to do more short sales or loan modifications to keep more homeowners out of foreclosure? Will it create tax incentives for investors looking to rehabilitate some areas in desperate need? Of course, no one can predict these things. But we'll need to pay attention. Some analysts are already saying 2011 is likely to be another "worse" year on record for housing. With that in mind, it is highly likely that Congress will try to take some action to keep the market moving or to save more Americans from foreclosure.

These are the main issues I think we'll need to pay attention to this year. Through it all, I think it will be important to focus on our single situations and whether it's the best time for us to buy or sell – regardless of all the outside influences. It still comes down to the buyer and seller of a single transaction.

Here is an excerpt from an article in Bay State Realtor Magazine January/February 2011:

written by Attorney Robert Kutner

In a decision issued in the heat of July, Papadopoulos v. Target Corp., the Massachusetts Supreme Judicial Court (SJC) greatly expanded the duty of property owners to clear snow and ice. For more than a century, the Massachusetts rule had been that property owners could not be found liable for injuries due to the "natural accumulation" of snow and ice.

NEW SNOW RULE

Every owner now has a duty to use "reasonable care" for the protection of vistors.

According to the SJC:

     "We now will apply to hazards arising from snow and ice the same obligation that a property owner owes to lawful visitors as to all other hazards: a duty to 'act as a reasonable person under all of the circumstances including the likelihood of injury to others, the probable seriousness of such injuries, and the burden of reducing or avoiding the risk'....Under this traditional premises liability standard, a fact finder [judge or jury] will determine what snow and ice removal efforts are reasonable in light of the expense they impose on the landowner and the probability and seriousness of the foreseeable harm to others....The Snow removal reasonably expected of a property owner will depend on the amount of foot traffic to be anticipated on the property, the magnitude of the risk reasonably feared, and the burden and expense of snow and ice removal."

If you would like the full article, I would be happy to email a pdf to you.

Black Friday For Home Buyers!

If you're looking for a condominium, how many condos were for sale, what was the average price, and how many days had they been on the market on Black Friday, Nov. 26, 2010 as compared with 1 year ago? I chose these 4 towns because they all had access to a commuter rail and they all were close to a major highway to Boston.

Last year at this time, there was a first time buyer's tax credit available, however this year, mortgage interest rates are far lower.

                             Total Properties            Average Asking Price        Average Days On Market    

Newton 2009:              151                                $527,135                              145

Newton 2010:              112                                $537,368                              139

Natick 2009:                79                                  $375,818                               105

Natick 2010:                77                                  $415,915                               210

Waltham 2009:           96                                   $327,804                               88

Waltham 2010:           91                                   $312,845                               91

Acton 2009:                64                                    $269,813                              153

Acton 2010:                73                                    $272,650                              157

I would be happy to give you more complete statistics about these or any other town that interests you.

Welcome to my Waltham report. This is a snapshot of single family homes that have sold in Waltham comparing this year with last year. For a 1 year period beginning and ending on October 27, you can see that more homes sold this year than 1 year ago, the average sales price is slightly higher than 1 year ago, and the ration between list price and sales price is also slightly higher.

I should also add that if you're looking to buy a home, interest rates are at the lowest in my memory, which is somewhere below 4.5% for a 30 year fixed rate.

Report Run: 10/27/2010 1:20:45 PM
Property Type(s): SF
Status: SLD
Start Date: 10/27/08
End Date: 10/27/09
Towns: Waltham

Total Properties	224	Avg. 76	$405,615		$422,187	96	$435,154	93
Lowest Price: $175,000 Median Price: $392,950 Highest Price: $935,000 Average Price: $405,615 Total Market Volume: $90,857,825 ________________________________________________________________________________________________         Report Run: 10/27/2010 1:25:33 PM Property Type(s): SF Status: SLD Start Date: 10/27/09 End Date: 10/27/10 Towns: Waltham Total Properties 277 Avg. 77 $412,788   $426,932 97 $438,154 98 Lowest Price: $140,000 Median Price: $395,000 Highest Price: $1,052,000 Average Price: $412,788 Total Market Volume: $114,342,195 I will be happy to send you a more detailed report which breaks down the sales by price.  I can send you a report about your particular town or towns. Just drop me an email.

 Ever wondered whether it might be a good idea to buy a vacation rental home which you and your family could use and have it pay for itself? Here are some questions and answers from an article in homeaway.com, a vacation rental site.

FAQ: Buying A Vacation Rental Home 

Q: Is vacation real estate a good investment?
A: Owning real estate is like investing in blue-chip stocks. Real estate very rarely loses in the long-term, especially in vacation markets. Real estate has almost no socioeconomic boundaries. The average middle class family owns at least one piece of real estate. You don't have to be a millionaire to invest. With a little money down and good credit, most people can reap the benefits. The best part of investing in real estate is that we're using someone else's money to help cover or at least offset the costs of owning our vacation property.
 

Q: Is now a good time to buy a vacation rental home?
A: Despite the current economic conditions, it might actually still be a good time for you to invest. Of course this is a personal decision, but in many markets vacation homes are still a solid investment if you're in it for the long-term.
 

Q: How do I decide where to buy within a given market?
A: Once you settle on an area for your second (or third or fourth home) you have to brainstorm all of the reasons why travelers vacation in that market. If there are certain major attractions, you don't want to purchase a home that is far away or inconvenient to these attractions. For example, if you want to buy a cabin in the Gatlinburg or Pigeon Forge area of Tennessee, you'll probably want to factor in the distance to Dollywood and to the main streets when searching for a potential cabin rental property.

Your options will obviously also be limited by your budget. As with most real estate decisions, the best investments tend to be in the best locations—and tend to come with a higher price tag. Your challenge will be to weigh your personal needs and wants versus your rental expectations. Research the prices of others homes in the area to make sure the location is right for your budget.

Q: What amenities should I look for in a potential vacation rental?
A: The must-have amenities largely vary by region. If your home is in an area where most rental properties include a hot tub, then that is something you need to factor in. This is common in the northeast and in other cool mountain areas like Gatlinburg, Tenn. You also have to look at what renters are looking for or what they're able to get. For example, in markets like Orlando, a majority of vacation properties come equipped with game rooms to attract families. This might not be a priority for your family but once travelers see it is common in the market, they might not settle on a house without one. This is something to consider so that you can stay competitive in the market. Lastly, remember your price range. If a home with a pool or hot tub is simply not in your budget, you may have to buy a property without the must-have amenities and then price your home accordingly to attract a different group of renters.

Q: What is the ideal number of bedrooms and bathrooms?
A: The “ideal” property size depends on the vacation market and the types of traveler groups that frequent the area. For example, in a market like Las Vegas that tends to attract couples, a smaller home or condo rental in a prime location might be ideal. However, in an area like Orlando that draws families with kids or even two or more families traveling together, a larger home with extra beds/bedrooms and a game room might attract more renters. You also want to consider the size of other homes in your area. If the market is saturated with 3 bedroom homes, you might consider a smaller or larger size to give you a competitive advantage over other homes in your area. While you want to cater to the majority of renters coming to your area, there is a lot to say for providing a niche that isn't already available in your location.

Q: How important is a view?
A: For many vacation home buyers, the view is an amenity in itself and an important piece of the puzzle. The key is to consider how it will affect your renters. A home with a view will cost more, but you can also charge higher rental rates. On the flip side, a home with no view will cost less, but you won't be able to charge as much as a home with a view. Therefore, consider the types of renters your home and location will attract. Will they be more price conscious, or are they looking for a more upscale experience?

Q: How do I determine a home's rentability as a vacation rental?
A: First, find out if the home has been rented as a vacation rental in the past. If so, ask for the property's rental history and ask the owner and/or property management company about their experience renting it. If a home has not been rented as a vacation rental, talk to other owners or property managers in the area to see how other rentals in the neighborhood or complex perform. Lastly, take a look at the location on HomeAway, VRBO, or VacationRentals.com to see the size of the properties, what rates the owners are charging, and how booked their calendars are. This should help gauge your rental potential if you';re looking at similar homes. Using these resources you should be able to ask specific questions and learn about the market as far as peak seasons, the off season, whether the area commands nightly or weekly rentals, typical prices, and number of weeks booked.

Q: Is it a good idea to buy a fixer-upper as a vacation rental?
A: Whether or not to buy a fixer-upper is really your call. While you may be able to buy a fixer-upper at a rock-bottom price right now, it may require a significant amount of time and money to make the property rentable and could require significant ongoing maintenance, which is especially difficult if your primary residence is not nearby.

Q: What should you research before buying a vacation property in a certain market?
A: If you intend to rent out your vacation property, one of the first things to check would be restrictions on short-term rentals. There are some markets that won't allow short-term rentals at all, and some require certain permits. Your real estate professional should be able to help, and you can also contact the planning department of your local government office to find any zoning restrictions. Properties on government-protected land are also tricky when it comes to rentals. Kauai, for example, has some strict requirements for homes on agricultural land. This is something else you';ll want to discuss with your real estate agent or the local government before purchasing. Another consideration is the cost to insure the home. Unfortunately, many vacation home destinations are in what are considered high risk locations. Near the water can mean risk of hurricane and on the mountains can mean risk of blizzards and snow storms. These high risk areas translate to higher insurance costs, so evaluate those prices before settling on an area.

Q: Is it better to buy a condo or a single family home?
A: There are pros and cons to each property type. A condo will obviously provide for easier maintenance from afar and also shared maintenance costs with other owners in the complex. You'll also be able to advertise the extra amenities in the complex. For example, you might not be able to afford a home with a pool, but if you buy a condo, your guests will have access to the pool in the complex. Vacation condos are also usually built in the best locations because the developers have enough money to invest in that land. At the same time though, there can be limits within the homeowners associations when it comes to rentals. You'll also lack privacy because you';re sharing walls with your neighbors.

A single family home, on the other hand, will provide for much more privacy. In general it can also be less expensive per square foot. However, you have to maintain the exterior and the grounds yourself. You might also have some association limitations in this case as well. And lastly, determining the rental demand is more difficult because it's harder to compare apples to apples. In a condo, you can talk to a neighbor with the same floor plan, but homes typically have too many variables to really compare.
 

Q: Can you use an IRA when buying a vacation home?
A: Yes, you can use your Individual Retirement Account (IRA) to purchase a vacation rental home. It's called a Self-Directed IRA. Realize though, if you use a Self-Directed IRA, there are some very strict federal guidelines. Notably, you are never allowed to stay in that home. It's to be used strictly as an investment. You'll also need a custodian to manage the account. To find a custodian or learn more about using Self-Directed IRA's to purchase vacation homes, just Google “Self-Directed IRA.”

Q: When buying a vacation home, how do you determine whether it should be classified as a “Second Home” or “Investment Property?”
A: Mainly for mortgage purposes, you need to determine whether you will be using your vacation home as a second home or as an investment property. This makes a big difference in the kind of mortgage you should buy. You must realize that this is only a question for mortgage purchases; how you claim your property on your income taxes is a completely different issue.

With a “second home loan” you must be able to qualify under the second home's terms. Generally it means you have to be able to afford it just as you would your first home. Under this loan, there is no consideration for potential rental income. Typically “second home loans” have around the same interest rates as a primary home loan.

An “investment property loan” is a mortgage where everyone concerned knows you are buying the property strictly as an investment. Accordingly, certain factors come into play. The bank will want to know the rental history of the property, which will be taken into consideration for your affordability factor. Also, these types of loans are considered by the lender to be higher risk. So the risk for the bank translates into higher interest rates and higher fees for you.

Q: I already own a cabin rental and am thinking of buying another. Should I buy a second vacation cabin in the same market as the first or should I buy somewhere new?
A: If you already own a second home and you're interested in another, you might consider buying in the same market as your current vacation home since you're already familiar with the area. However, this does not allow for diversification or a variety in your own family's vacations. Some owners choose to have a beach house and a ski lodge or a cabin in a cooler climate so that they can stagger their busy seasons, enjoy different kinds of vacations, and also manage risk in case of any natural disasters. But this also means more research to really learn each area.

If you're looking to buy or sell a multi-family home, how are sales doing in your city or town today vs the height of the market which was 2005-2006? Well, here's a comparison for the city of Somerville, which is very popular due to being serviced by two subway stations, the Orange Line and the Red Line.

The average selling price this year is still below that of the peak, and fewer homes have sold, but it's better than it was in 2008-2009! The average days on market is also lower this year than it was last year or at the peak of the market. That is good news, because it shows that houses are not staying on the market as long.

 Report Run: 10/25/2010
Property Type(s): MF
Status: SLD
Start Date: 10/25/05
End Date: 10/25/06
Towns: Somerville

Total Properties	189	Avg. 80	$589,370		$612,453	96	$640,905	92
Lowest Price: $350,000 Median Price: $565,500 Highest Price: $1,675,000 Average Price: $589,370 Total Market Volume: $111,390,875 ____________________________________________________________________________________________________________  Report Run: 10/25/2010 Property Type(s): MF Status: SLD Start Date: 10/25/08 End Date: 10/25/09 Towns: Somerville Total Properties 156 Avg. 88 $466,624   $482,423 98 $506,013 94 Lowest Price: $202,000 Median Price: $458,750 Highest Price: $870,000 Average Price: $466,624 Total Market Volume: $72,793,325 ________________________________________________________________________________________________      Report Run: 10/25/2010  Property Type(s): MF Status: SLD Start Date: 10/25/09 End Date: 10/25/10 Towns: Somerville Total Properties 147 Avg. 72 $511,303   $522,444 98 $534,659 96 Lowest Price: $240,000 Median Price: $503,000 Highest Price: $940,000 Average Price: $511,303 Total Market Volume: $75,161,597 * - 1 auction listings are not included in this report's calculations

How many single family, multi family and condominiums are on the market today, compared with last yeart in the city of Newton? What is the average price? How long have they been on the market? This information and much more was gathered directly from the multiple listing service. Keep in mind that this is a snapshot of October 25, and it shows only the asking prices, not the selling prices.

If you're interested in what's happening in your city or town, send me an email!

I can also provide you with information about properties that have sold for 1 month, 1 year, 3 years, etc.

10/25/2009			10/25/2010
Price Range	Number of Listings	Avg. Days on Market	vs. today	Number of Listings	Avg. Days on Market
Under $50,000	-	-		-	-
$50,000 - $99,999	-	-		-	-
$100,000 - $149,999	-	-		-	-
$150,000 - $199,999	1	181		-	-
$200,000 - $249,999	10	147		11	148
$250,000 - $299,999	24	108		25	85
$300,000 - $349,999	22	124		17	128
$350,000 - $399,999	22	150		18	130
$400,000 - $449,999	28	104		35	114
$450,000 - $499,999	30	76		17	99
$500,000 - $599,999	42	93		39	108
$600,000 - $699,999	41	111		43	130
$700,000 - $799,999	44	110		39	98
$800,000 - $899,999	22	119		32	95
$900,000 - $999,999	19	98		20	108
$1,000,000 - $1,499,999	49	126		43	112
$1,500,000 - $1,999,999	24	138		34	151
$2,000,000 - $2,499,999	16	174		16	143
$2,500,000 - $2,999,999	10	96		6	291
$3,000,000 - $3,999,999	6	218		6	94
$4,000,000 - $4,999,999	1	236		3	111
$5,000,000 - $9,999,999	1	44		3	109
Over $10,000,000	-	-		-	-
Total Properties	412	Avg. 117		407	Avg. 118
Lowest Price: $189,900 Median Price: $672,000 Highest Price: $7,995,000 Average Price: $913,491 Total Market Volume: $376,358,472			Lowest Price: $218,000 Median Price: $699,900 Highest Price: $7,995,000 Average Price: $967,251 Total Market Volume: $393,671,233