Uncategorized – Orcas Island Real Estate by Roxy

July 8, 2015February 17, 2018

Lessons Learned – The Value of Leveraging with Real Estate

The probability that in San Juan county property values will rise before the island economy recovers is something islanders should consider if they are thinking of purchasing a home.

The real estate market in the San Juan islands is a bit different than most other small communities. On the mainland the local economy typically drives the local real estate market.

The San Juan islands differ in that a significant number of properties are second or vacation homes for people who work and live in other parts of the country. These homeowners are using income generated elsewhere for their purchase. Therefore the island economy plays a smaller role in the decision to purchase.

What might an island resident do to achieve their American dream of homeownership in this situation? One possible option is to “play the market”. Invest now into something small and affordable or in need of cosmetic fixing. As prices begin to rise you gain equity. Use that equity by selling the small home and purchasing a larger home.

Remember the big down cycle in the real estate market in the late 1980’s? While it wasn’t a crash as deep and long as the current cycle it did present some excellent opportunities to buy into real estate. Once recovery began many places saw their values recover in less than one year.

If you are looking to achieve your dream of ownership think about getting ahead of the pack. Make your investment now and ride the market upward. You may have to lower your expectations. Instead of owning a dream home, make it your goal to ‘just get your foot in the real estate door’. If you aren’t handy enough to invest in a ‘fixer’, purchase small. If you are handy, consider a ‘fixer’. There is a lot to be said for sweat equity. Either way the plan is to hold onto the property long enough to build equity. Equity is used to leverage into a ‘better’ home as the market improves.

Think about this. Real estate is one of the few areas of investing where you can leverage into an investment. Let’s say you have $10,000 in the bank and have a stable job and good credit. You invest that $10,000 in a $100,000 house. Now assume the market recovers at a conservative 3% in the next year.

If you left the $10,000 in the bank do you think you’d receive a 3% interest rate? Probably not. Even if you were lucky your $10,000 would have earned only $300. Now say you invest that $10,000 in a $100,000 home. Your equity will be closer to $3,000 or ten times more than you’d earn from the bank.

If you’d like to discuss how you might leverage your savings into home-ownership give me a call. I’m here to help.

April 28, 2015February 17, 2018

Lessons Learned – The Importance of Inspections

In my last post I talked about how to take advantage of the physical inspection report. In this and the next few posts I’ll talk a little more about the various types of inspections and the value they bring to the purchase process. If I could share only one lesson I’ve learned from the home-buying process it would be the importance of inspections. Inspections help to prevent the purchase of a “money-pit”. They help to support the value. And they provide a sense of security.

A properly drafted purchase contract will give the buyer the right to fully investigate the property. Typically they have a specified period of time in which to complete inspections. Inspections educate the buyer about existing issues providing them with a better picture of the condition or value of the property. The reports give the buyer documentation to support a request to the seller for a repair to a preexisting problem. And the report provides the new owner with a checklist which can be used to prioritize on-going preventative maintenance.

While the physical inspection report may be one of the first and more valuable investments you make in your new home there are other inspections to consider. The purchase contract and inspection contingency form point out some of the other areas to inspect. The physical inspection report may call for additional inspections. And the disclosures may bring to light a potential issue. Review all of these and discuss with your Realtor® the cost and timing to have specialists perform an in-depth inspection.

Other inspections commonly performed within San Juan County are those for the septic, well and wood-destroying organisms. My next few blog posts will talk about these inspections in a little more detail. If you’d like to learn more please feel free to call or text me at my anywhere number 619.224.9015 or e-mail Roxy@RoxyMarck.com

January 15, 2015February 17, 2018

Lessons Learned – Buying Orcas II

Back again! It’s now September of 2001 and I’m off to Orcas Island to hunt for property. Let’s take a moment to talk about a few things I should have thought about before I started looking.

Orcas, as you’ve probably already figured out, is located in the Pacific Northwest. Summer days are long and warm. As a summer visitor from San Diego one tends to forget the flip side of that benefit, the short, cold days of winter. Orcas is mountainous. During the winter the north sides of Mount Constitution, Pickett, Entrance, Willard, Turtleback, Buck, etc. receive significantly less light than the south sides.

There are a large number of tall trees growing on the island. These factors should be considered when planning to purchase a home in which you intend to live during the winter. I’m not suggesting that you eliminate a home on the north side of a mountain. But it could be a consideration if you are trying to decide between two homes.

The economy on Orcas is tourist-based. If you plan to rent out the house when you aren’t vacationing, expect very little income. You might consider turning the property into a vacation rental but there is a down-side to that also. I’ll talk a little more about renting in a future blog post.

Okay, back to Orcas and hunting for property versus sitting on a log at North Beach drinking in the view.

I’ve found a couple of vacation rental condos available in Eastsound. They have a fabulous view of the water, a live-in property manager to handle all the details of renting and are well within my budget. The market analysis indicates rising values. Everything looks attractive except the limitation on how much I can use the place myself.

While I agonize over my decision it is brought to my attention that a certain family member will be heartbroken if I don’t at least look at the home they have for sale. The price is a smidgen above my comfort price but well within my qualification. I figure it wouldn’t hurt to at least look at the place.

And now we come to my first mistake. I fell in love with the view. I’m certain that I was manipulated into a visit at sunset. The sky was a palette of color ranging from deep blue to gold to bright orange. I could see sail boats off the northwest shore and the Canadian Rockies in the distance. In front of this was a perfect view of one of my favorite places on the island, Madrona Point.

Who wouldn't fall in love with this view? — Who wouldn’t fall in love with this view?

What color was the carpet? Don’t know, wasn’t installed yet. Did the roof leak? Don’t know, wasn’t finished. Decks were in the process of being built. You could not inspect the foundation because the crawl space was filled with junk. Appliances were sitting ready there ready to install. Lesson learned, make sure the work is complete before you close escrow. And have a second inspection to be sure the work is completed properly.

I wrote the offer anyway. I thought that since this was a purchase from a family member I was reasonably assured that the work would be completed with good attention to detail so I skipped the second inspection. Unfortunately the contractor they hired didn’t install a critical flashing. Years later I faced an expensive repair. Oh and maybe you should spend a little time looking at the house instead of the view. Just a thought.

Stay tuned for things I’ve learned about home inspections. Or if you are ready to start your property-hunting adventure call me at 619.224.9015 and we’ll get started.