Archive for the 'Seasonal VT News' Category

Consider Purchasing a Summer Camp for Equity

This camp in St. Albans is for sale - what a GREAT Get-away

By now, cabin fever has hit me full force.  I wistfully look at my friend’s pictures of St. Maarten and desperately want to plunge my toes in the sand.  I even tried plunging my feet into the snow on my deck, but alas, the sensation just wasn’t the same.

So to keep me placated until the snow melts, I started remembering summer camp.  My folks rented a camp for a week on Lake Champlain and it was one of the best summers I’ve ever spent.  With the economy the way it is, many families are looking for ways to make their vacations pay for themselves and owning a great getaway is not only a treat for yourself, but an obvious equity builder.  Here are some tips when shopping for your summer retreat and how to rent it out to ensure a tidy profit at the end of the season.

1)  Location, location, location.  This is a no-brainer, but still, people will look at the “great deal” and neglect the essentials.  You want to make sure your retreat is close to entertainment, hiking, biking, kayaking. Is it easy to find?  Is it in a desirable spot?  Does it overlook the lake or a swamp?  Remember, you get what you pay for.
2) Accessible – Sometimes, summer camps aren’t plowed out in the winter.  Make certain you know who takes care of the plowing, road maintenance, and how often it’s done.  You don’t want to book a December get-away if your guests can’t access the driveway.
3) Year-Round or Seasonal Retreat – If it’s seasonal, what exactly does that mean?  What maintenance needs to be performed each winter to protect your investment?  Are there other vacation properties rented out close by and what’s their rate of fulfillment?
4) Show Me The Money – Check with the local town zoning laws to make sure you can even rent it out in the first place.  A top-notch real estate agent will go to the town clerk’s office to check over the deed, zoning, etc to make certain your intentions can be followed through on.  NEVER go blindly into the deal assuming you can just “do it under the table.” 
5) Right-of-Ways – If you’re getting a summer lakefront camp, make sure you know who has the right-of-way not only to the driveway, but to the dock, beach and lake access.
6) Water and Septic – Some summer camps may have a shared well or septic.  A good realtor will have already done their homework and can tell you what the story is with the property.
7) Get an Inspection – Especially with a 3 season property, you’ll want to make certain maintenance has been done to avoid headaches down the road.
8) Tax Impact – Make certain you know the state tax laws concerning second homes and see if it outweighs the equity you’ll be building over time.

So if you’re still suffering the throes of cabin fever, snap yourself out of it by checking out this beauty of a summer camp right on the lake.  If you’d like to view it, we’d love to show it to you (we get cabin fever too!)  Just contact us for a viewing.

North Beach Burlington

Summer is officially upon us here in Vermont, and what a beautiful start we’ve had. Most will remember that the summer of 2009 was one to forget with rainy days most certainly dominating the forecast. And even though I’m at the risk of speaking to soon, so far 2010 has brought record temperatures and plenty of warm and sunny days to the Green Mountain State. Vermont has so much to offer during the summer months, when the weather provides it with the opportunity to do so, and vacationers know that if you’re looking for hiking, boating or dining with a view, Vermont is a great destination.

And if you have ever thought to yourself that it might be time to find a permanent vacation spot in Vermont, you won’t find a better time than NOW! According to the Vermont Property Owners Report, vacation homes and condominiums are experiencing a dramatic decline in price. Despite the uncooperative weather in 2009, vacation home sales in Vermont saw a surprising increase. Vacation home sales processed in July through October were up 61.6% compared to 2008.

So with vacation homes in Vermont showing an 18% price decline in 2010, we can expect a great number of sales this summer as well. Buyers, you’ve been presented with a great opportunity to finally get into that perfect Vermont vacation home you’ve been holding out for. Prices are down, the weather is up, and now is a great time to buy!

Today (another Bee-u-t-ful day in Vermont), I went to a class called ‘Vermont property tax prebate/rebate’, presented by a local attorney.  Don’t you just

Let the fun begin!

love the topics this time of year…taxes, taxes, taxes!  This tax issue has to do with all the Vermonters who have lived in a ‘homestead’ for all of 2009 and whose net household income is less than $97,000.  I’m sorry I can’t define the ‘net household’ part for you, but that’s why tax season is so much fun.  We all get to do a whole lot of esoteric figuring and then wait to  hear back from the tax department to see what we got wrong.

First of all, let’s get the terminology straight.  The prebate is formally known as a property tax adjustment.  It came from act 60 in the early part of the 2000’s.  What it attempts to do is redistribute education tax money we all send to the state so that children, no matter what town they live in (property rich vs. property poor), have better access to an equal education.  Now, I don’t know the numbers, but based on the $97,000 threshold and the fact that the average household income in Vermont is way less, many Vermonters get some prebate factored into their tax bill (yea!).  It could be as low as almost nothing, up to $8,000!  Most people would not get the higher amount, but the reason I’m telling you all this is the effect this prebate has on the real estate transaction between 4/1 and July 1.  April 1 of each year, as Vermonters know by now, is the date we establish whether a home is a primary residence which is taxed at a lower rate than if a home is not considered a primary residence, and qualifies us for a possible prebate.  Prebates are received as equally divided credits on our tax bills throughout the year.

"Considering the tax shelter"

In Colchester, for instance, property taxes are due in August, November and March (March 15, to be exact).  If a transaction closes between March 15 and April 1, that’s easy because the seller has already received back all the prebate they are due.  The prebate doesn’t affect the transaction.  Any other time during the year, the prebate is a predetermined cost to negotiate between a seller and buyer.  EXCEPT, between 4/1 and 7/1, every year, the prebate can only be estimated by the seller since the state won’t have the exact number available until 7/1.  Many times, this isn’t a huge deal if the seller’s tax situation hasn’t changed much from the year before (a ball park figure can be helpful).  To be more accurate, it’s best if the seller completes a worksheet, available at the VT Dept. of Taxes website.  You’ll need to have your forms HS 122 and HS 144 completed to fill out the worksheet.  Confused yet?

Why does this matter to anyone anyway?  Well, since I’m a Buyers Agent, I definitely want to know if my buyer is going to have shell out some extra coin to factor into the transaction BEFORE closing (like, way before closing).  And, my buyer would rather not wait until halfway through the closing process to find out, either.  Remember, no surprises before or during a closing is a good thing.  I hope you’ve enjoyed this simplified explanation.  It’s time for another cup of joe.