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Investing in Berkshire County Condos, Homes or Land - Top 10 Tips

Tip #1

Engage an experienced Realtor with a wide variety of knowledge – the more years of proven success and experience the better     as your Exclusive Buyer’s Representative:

Tip #2:

Be as clear as possible about what you really want before contacting the Realtor:

  • Take time and drive around to different areas, see different locations, get a feeling for what areas feel right, meet your goals and needs
  • Consider your age and ability to take care of land—size of acreage, mowing, plowing, etc. as compared to the condominium lifestyle for example
  • How much privacy will you trade off for convenience --close to town amenities, or the big spread in the country

Tip #3:

Have a realistic budget:

  • If financing, take the time to get pre-qualified or even better yet, pre-approved as this will make you a stronger buyer with more credibility as well as confidence
  • Let your Realtor refer you to their network of local lenders who have a strong vested interest in our communities and who are typically more efficient and cost effective by far, than out of the area or internet based lenders
  • Be prudent and reasonable. In other words, be realistic in your expectations and reasonable in the negotiating process

Tip #4:

Be prepared for expenses associated with ownership:

  • Some residential properties may have income potential (rental apartment, two family, seasonal rental, etc.) but all have carrying costs
    • debt service on the mortgage, real estate taxes, insurance
    • Dues or association fees in the case of a planned subdivision or condominium ownership
    • Snow plowing, mowing, yard care
    • Maintenance, repairs and upgrades to the property or structures

Tip #5:

Be aware of changing markets, both favorable and unfavorable:

  • New development, schools, businesses, coming into area
  • Second home buyers moving in to compete with first home buyers
  • Spillover effect from neighborhoods or towns nearby
  • Blight or stigma, pollution
  • Job or plant expansions or closings
  • Effects of potential uses permitted under current zoning & potential for changes in zoning

Tip #6:

Be patient if you don’t have to buy immediately, but be prepared to act quickly when the right property comes along:

  • Real estate is not a liquid asset
  • All homes and property are unique and what you want may not be available
  • Market trends will effect the amount of listings and buyers often putting upward or downward pressure on  prices which in turn brings out more sellers or buyers which effects the degree of choice
  • Promptly go after the really good properties that are priced right —other buyers and agents will recognize the same thing so when the shoe fits, act decisively
  • Making an offer does not assure you of getting the property or priority consideration. The negotiations are not over until both parties have signed and returned the contract. Until that happens, other offers can come in, the property can be purchased by anyone

Tip #7:

Comparison shop for value, just like you would for a car or any other major purchase:

  • Some sellers are overly optimistic, uninformed, unrealistic or greedy—avoid these properties, they will almost certainly be cheaper later—the market tends to be rational except in times of economic boom when prices can exceed reason in some cases
  • All homes are definitely not the same—Many factors affect value, including location, condition, amenities, aesthetics
  • Check comparable sales in the area for 2 or 3 years—6 months is not enough time in some areas and markets if sales have been infrequent—a well informed experienced Realtor will have this information readily available

Tip #8:

If you are building, have the right contractors and tradesmen available, and have a realistic schedule of just how long the process takes.

  • Good building contractors are busy and will most likely not be available at the drop of a hat—sometimes up to a year or more for the desirable ones—give yourself lots of time
  • Winter impacts construction and schedules, even with modular construction
  • An experienced Realtor will have a database of names of reliable modular home builders and general contractors
  • Building isn’t for everyone, but can be very satisfying if you have the right mindset

Tip #9:

Consider buying “investment property” for asset diversification:

  • “Hard” asset
  • Lackluster and often unpredictable returns on other investments (stocks, bonds)
  • Large institutional investors typically keep up to 20% of their assets in real estate
  • If you use a property manager, you can invest in real estate without the aggravation of direct management
  • There are significant tax incentives available including depreciation and other write-offs

Tip #10:

Consider buying a larger property than you might have planned:

  • Lower cost per square foot or land area
  • Possibility of subdividing or further developing to lower cost even further
  • Special tax status (Chapter 61 in MA, Current Use in VT) for managed woodlands
  • Creates opportunities for other family members to live on the property or for future family needs

Top Tip for anyone considering a real estate investment:

Always seek out the most experienced expert in the field, as he or she will have had years of proven experience in the business, have invaluable contacts and depth of insight that newer younger practitioners simply have not had the time to accumulate. Experience and a proven track record in the type of real estate that interests you, can make a very significant difference in the outcome of your transaction.

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