Turn-of-the-Century Columbia County Farmhouse 289K

VINTAGE FARMHOUSE, check. Catskill views, check. Barn, ample grounds, big pond. Check, check, check. Two hours from NYC — check that, too.

What more do you want for 289K? To be set far back from the road? Sorry, that’s the one thing you cannot have.

But this new-to-market 1905 farmhouse in Livingston, N.Y., on a 4.4 acre hunk of land with stunning mountain vistas, has an awful lot going for it. At 1,500 square feet with 3 bedrooms and 1.5 baths, and reasonable taxes under $4,000/year, it drives home the point yet again that New York’s Hudson Valley offers some of the best real estate values around. From a Hamptons perspective, it’s an outrageous steal.

Good food for fantasy, too. Look at the space below, in the attic of the barn, one of several outbuildings on the property. What kind of workshop, painting or pottery studio, writer’s retreat, guest quarters could you make out of that?

A few more tantalizing details from the listing: there are wood floors, plaster walls, and original fixtures, yet the house’s innards, including the furnace and septic system, are new.

That’s not all: there’s an original smokehouse, chicken shed, garage and 3-seat outhouse. All have original clapboard siding (as does the house), and are set among lilacs and pear trees.

And you won’t even have to think up a name for the place. It’s known as Watercress Hill, for the wild watercress that thrives (even in January) in the year-round stream a few feet from the back deck of the house and the spring-fed pond.

For lots more photos of the interior and property, go here. Worth a look, wouldn’t you say?

BOOK REVIEW: Crash Boom! Rx for Real Estate Wealth

I’M NORMALLY EXTREMELY SUSPICIOUS of financial ‘gurus’ and of people who have their heads swayed by their often-dubious advice. But a new book by Greg Rand, a real estate entrepreneur who contributes to Fox News (maybe that’s why I hadn’t heard of him) and has a radio show on WABC, has come to my attention. Crash Boom! Make a Fortune in Today’s Volatile Real Estate Market speaks to me. Naturally I like what Rand has to say: he validates my own experience and makes me think I’ve been on the right track by investing in rental property and clinging to it for dear life.

I’ve bought six properties, but never sold one. I’m an accidental real-estate investor. It started in 1979 with a Brooklyn row house that has three units, then a re-finance and the purchase of another Brooklyn townhouse in the mid-’80s, with two units. Both were bought primarily as homes; they just happened to have these extra apartments, which we rented out. We then let years go by — years when we could have swept up brownstones for a song — without investing in any other NYC property. But let’s not go there; my blood pressure numbers have been good lately.

It wasn’t until 2005, when my son went to college in Philly, that my attention turned purposefully toward investing in rental real estate, and I bought two early 19th century Philadelphia row houses with a total of five rental units. One is in a solidly upscale area (Queen Village), the other in a fringe neighborhood (Old Kensington) that nevertheless seems to be improving at breakneck speed. Both buildings have had positive cash flow from the beginning — not hugely so, but most definitely in the black, while I build equity month by month. Perhaps most important, I enjoy owning them. For me, it’s like collecting antiques — very large ones.

Buy, Improve, Hold is Rand’s prescription for building real estate wealth. Of all types of investment properties, he’s most partial to two-to-four family homes. “An incredibly appealing property type,” he says, and I concur. More tenants paying rent. And desirable: people want a backyard, Rand points out (most of my tenants have them, either shared or private). Though Rand doesn’t specifically mention vintage properties, many of the examples he gives, including a Victorian mansion in Tarrytown, N.Y., with commercial space on the ground floor and residential units above, resonate with me much more than if he was solely discussing condos or suburban homes.

Almost everything Rand says rings true to my ears. Here are some of his main points:

• It’s a great time to be a landlord. The current economic climate is providing investors with the opportunity to get a ‘deeply corrected’ price, and it also comes with a wave of new renters (800,000 new rental households in 2009 alone).
• The ‘technical drivers’ of real estate wealth — appreciation, leverage, amortization and income — do not exist together in any other form of investment. He likens these elements to a mixing board in a sound studio, calling them ‘the four dials.’ “As you push each of them up a little bit, the volume gets exponentially louder. You don’t need any of them to perform off the charts to get off-the-charts results.”
• Re appreciation, Rand points out that home prices are still above where they were ten years ago and the market is almost done ‘correcting.’ “In other words, the entire bubble has been erased. Poof! Gone.” In the long view, the historical upward trajectory is intact.
• Leverage steepens the return as a percentage of investment. Because most people buy real estate by taking out a mortgage, the cash invested initially is smaller in real estate than in the financial markets, compared to the eventual return.
• Amortization (paying off a mortgage) lowers the amount you owe as time passes.
• Rental income is icing on the cake.

The book also delves into what, for me, is the most seductive, creative aspect of the whole real-estate game: fixing up an ‘ugly duckling.’ Rand advocates finding properties in need of upgrading, not turn-key ones. He loves long-languishing properties that have become stigmatized, as in “Something must be wrong with it if it’s been on the market so long.” Let others pass it up. That’s where you can often find bargains, he says — something I’ve intuitively understood for a long time, but am still heartened to see in black and white.

Mind you, Rand’s book doesn’t say you’ll get rich quick. “A good buy on a house means you set yourself up for even greater returns as you ride the cycle forward and mature the investment over time.” The biggest mistake people make in real estate, he says, is selling in order to realize the profit, adding “Don’t do that!” He views equity in real estate as liquid, which is refreshing. True, it takes a few months to get to it, but it’s still a good place for your money. Let it stay where it is “until you have another real estate play to make or your objective has been met” (say, when it’s time to send a child to college).

There’s lots more — from how to find a neighborhood on the upswing (“Home Depot and Lowes don’t open stores on a whim”), to owning near where you live and work, to buying distressed and foreclosed property. And there are quite a few surprises (Rand thinks Florida is still a great place to invest, for instance).

My one disappointment is that Rand is not terribly helpful when it comes to how to get the money for a down payment in the first place. I hope that’s the subject of his next book.

To see my archive of blog posts on Rental Property Management, go here.

Prospect Heights in Today’s Times

THE NEWSPAPER OF RECORD has become the newspaper of the obvious. Today’s “Living in…” column on my recently adopted Brooklyn neighborhood of Prospect Heights, in the Sunday New York Times Real Estate section, tells me nothing useful or surprising, and almost nothing I didn’t know (except about the public schools, whose performance is sadly more abysmal than I thought). One wonders if the Times’ hard news stories are equally self-evident to those in the know. One hopes not.

I’m glad to see in black and white that the long-opposed and now quickly rising basketball arena has not yet affected property values in the neighborhood, at least according to the brokers quoted. Overall, the article says, the “popularity and relative scarcity” of Prospect Heights’ brownstones “protected their values in the downturn.” They are “consistently in demand because there is a small supply.” Always glad to have my own biases confirmed. That’s kind of the whole point of this blog (see “10 Reasons Old Houses are a Good Investment…” in column at left).

There was one small surprise: to read that one-bedroom apartments in the neighborhood “command as much as $1,800.” I wish. I pay more than that for mine.

Only one lucky shop and two restaurants are mentioned of the dozens and dozens that line Vanderbilt and Washington Avenues, and the “history” of the neighborhood is confined to two sentences about the composer Aaron Copland at the end, as if they ran out of column inches — but there are no column inches in the digital world.

Perhaps I’m just feeling grumpy, though it’s a beautiful April morning and I’m about to head out for a walk in Prospect Park. Probably I feel a certain proprietary interest in the quality of Times reporting, since I used to write a lot for the Home and Styles sections. And — full disclosure — maybe I’m grouchy about this particular column because last year I sent a well-thought-out pitch for a “Living in… Springs” (Long Island, N.Y.) to the editor of the Real Estate section and never got so much as a “No, thanks.”

The author of the Prospect Heights article is a New York Times media reporter, and the column is always formulaic. But still. Come on, Times! Tell us something we don’t know.

Historic Rhinebeck under 400K

THE CHELSEA CLINTON WEDDING EFFECT on real estate prices in Rhinebeck, N.Y., if ever there was to be one, seems like a non-starter. As we head into the best time of year for house-hunting — the dead of winter, when only the most serious shoppers are on the case — the mid-Hudson Valley is still very good value, especially compared to eastern Long Island, where for $400,000 your choices are nil but for the dreaded ranch.

In the Rhinebeck area, venerable architecture is not too much to ask for 400K. Were I in the market for an upstate place at this moment — and gosh, maybe I should be — I’d look at these two, a rare brick Federal-style farmhouse for 379K, above, and an 1830s Carpenter Gothic, offered at 399K, right. The listing agent for both is Paul Hallenbeck.

Brick houses are fairly unusual in this part of New York State (most are frame). To find a stately 1849 farmhouse on River Road, very near the Hudson River and the Bard College campus, is a double-whammy (there are no ‘bad parts’ of River Road). The 1.1 acre lot is high and open; the house has 3BR, 2baths, and original details including woodwork, floors, doors, and built-ins, with updated mechanicals, baths, and windows (pics below). Period barn and wildflower meadow included.

Rhinebeck village has almost exclusively old houses, many with some pedigree. The 3BR, 2-1/2 bath on Montgomery Street (all pics below) is an 1830s Carpenter Gothic reminiscent of Washington Irving’s Sunnyside in Tarrytown. It’s on 1.4 acres, with mature trees and a fenced garden; the house has 9-foot ceilings and a large porch, and there’s a classic red barn. The taxes are high for the area at $8,306/year (twice that of the house above), which is a drag.

For more pics and info on both houses, go here.

Note: I am not a real estate broker, nor do I have any financial interest in the properties mentioned on this blog. I just like spreading the word about old houses on the market and what I feel are viable investment opportunities.

Lonelyville Charmer 649K

OF ALL FIRE ISLAND COMMUNITIES, each with its own beachy character, my favorite has to be Lonelyville. First of all, there’s that great name, which it seems is also the title of a bluesy number sung by Della Reese in 1958 (as well as an episode of Law & Order, seventh season).

Lonelyville is bohemian, a little off the beaten boardwalk. It doesn’t have its own ferry landing; Dunewood is the closest. There’s no grocery store or lifeguard stand.

I  have fond memories of spending a month in Lonelyville in the early ’80s, when my parents rented a cottage there. Vegetation was much sparser then. There were long stretches of sand between houses, some of which are old cedar-shingled cottages floated over on barges from the mainland.

Today, Kitty King, a real estate agent, showed my sister and me this hidden, 3BR oldie a short way from the ocean, with a spectacular pergola-covered roof deck. It’s just the kind of place I like — quirky, comfortable, oozing with charm.

The sellers have owned the house for 40 years. It’s been on the market for quite a while, apparently, and has already been reduced once. While 649K may seem a lot to ask for a house that can only be used part of the year, it is reasonable for Fire Island, where quite ordinary houses are priced in the 700’s and 800’s.

No house with birds and vines painted on the porch ceiling could possibly be ordinary.

For more info, go here.