October
2010
In my experience I’ve found that many people don’t know the difference between assessed and appraised values; oftentimes the values do not align and this causes confusion. To begin it is important to define the terms: Assessed Value: The dollar value of an asset assigned by a public tax assessor for the purposes of taxation. Appraised Value: An evaluation of a properties value at a given point in time by a professional appraiser. These professionals are typically hired by lenders to originate a loan. Now that the terms are defined, let’s now address why there is often a discrepancy in values. The first thing to note is that while appraised values are based on current comparable properties, assessed values are often based on comparables from prior years. Property values are assessed on Jan. 1 of every year. Assessed values today should be based on Jan 1. 2010, but until these tax bills are approved in the third quarter, these values can only be used as estimates. That means that the most reliable assessments that we have today are based on a property’s assessed value as of Jan. 1, 2009. This time gap is one major reason why there is a huge difference in assessed and appraised values. When looking a piece of property make sure you ask when the property was last assessed. Secondly, appraisers are much more thorough in their analysis; they confirm square footage, quality of the property, finishes, amenties, etc. Oftentimes, tax assessors do not even go inside the house; they base their values off of their “best guess” of the condition within the house. In conclusion, appraised values are typically more accurate. They are more up to date and take into account many features of a property that could not be considered from the outside of the property alone.
For more information contact gmorello@live.com
October
2010
Rent vs. Own – What Makes Sense?
With values as depressed as they are in today’s economy, many renters are asking themselves the same question: “Should I continue to rent or should I buy?” There are many factors that can make or break your decision to rent or buy, but the most critical is certainly time. How long will you be living there? In order to benefit on the buy side it is necessary that you are going to stay put for a few years. If you are considering moving to another location in a year or two, renting is probably the way to go. Of course there are other considerations – rental payments, principal and interest payments, loan to value, etc. – but length of stay is crucial. The above spreadsheet is what we use to weigh the pros and cons of renting vs. buying. Let’s use the Audubon Park Condominiums at 16 Miner St. as a case study. The secret to making a sound investment decision is “buying right”. If you can get your price at 16 Miner St. and you plan to live there for at least 3 years, the benefits of buying are substantial. Let’s say that monthly rent for a two bedroom at Audubon is $3,200. After year 3, you will have paid $115,200 in rental payments (this is assuming the optimistic but unlikely event that your rent does not increase). Now let’s consider you purchase a 2 bedroom condo at auction next Tuesday for $425,000. You put 25% down on a 30 year mortgage at 6% annually. Considering a 2% capital appreciation rate and a 4% cost of money, the potential gain for buying vs. renting is $45,588 in year 3. By year 5, you’ve saved close to $93,000. Other perks also include the tax benefits, which will vary depending on the buyer. Clearly, buying is the way to go if you have the $$ in this economy. 16 Miner St. is an amazing opportunity to make a sound investment by “buying right”. From what I hear, the developer is “giving these units away”. Even if you do decide to move out early, you can always rent it out and make a healthy annual return. To request a spreadsheet or investment analysis specific to your needs contact gmorello@live.com
**Note: All numbers here are projections based on our own conservative estimates. Purchase prices, loan terms, rents, and all other factors may vary.
August
2010
New Landlord? Rental Deposits
by Evan, Boston 
Students are coming to invade an apartment near you! With 20,000 new students on their way to Boston, the rental market is steady. Landlords should definitely review the process of handling last month’s rent and security deposits so there are no problems when the term of the lease comes to an end. Landlords are more liable than they think when it comes to handling these deposits so its an area to be careful in. Here are the requirements for holding a security deposit:
When the deposit is tendered, the landlord must give the tenant a written receipt which provides:
- the amount of the deposit
- the name of the landlord/agent
- the date of the receipt
- the property address.
Within 30 days of the money being deposited, the landlord must provide the tenant with a receipt stating the amount, bank and account number. The security deposit must be held in a separate interest bearing account that is protected from the landlords creditors. Also within 10 days after the tenancy begins the landlord must provide a written statement of the conditions that the tenants received the property in. Which then gives the tenants a chance to disclose any other damages that were not noted. The security deposit MAY be used for unpaid rent or reasonable damage to the unit. But they MAY NOT be used for eviction costs or attorney fees. The security must be returned to the tenants within 3o days of the tenants leaving. If you follow these directions then you’re in the clear!
July
2010
One a week we will put together a list of Real Estate and General Business Articles that you might be interested in each week we will have a different focus this week is (Start Ups and Entrepreneurs) – feel free to start discussion in our comments section on any of these articles….
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Cool Products
Why Young Entrepreneurs Fail:
INC’s Top 30 Young Entrepreneurs
- Check out the ‘Rooms for Rent’ start up very interesting – could it be applied in Boston? http://www.airbnb.com/
June
2010
My last case study on Seaport Square showed readers that the Seaport is trying to become the new “go to” location in Boston; residential, retail and restaurants. Most of the city approved developments have been staled and with past fails and hardships that Gale International has faced with their projects, people aren’t getting their hopes up yet. BUT there is something exciting coming to the Seaport that seems like it has risen from the sea and is on pace to be done by the end of the summer. Its Liberty Wharf, which was acquired by the Cresset Group development team in 2007, which is roughly 70,000 sq. ft. of mixed use space right where Jimmy’s Harborside used to be. This is PRIME real estate and will be a summer attraction for all of Boston. Finally developers have begun to develop this under utilized waterfront haven!
Project Description
This is one of the most exciting projects that is under construction right now. It is being constructed on the former Jimmy’s Harborside and is going to bring an ideal urban lifestyle feel to the Seaport District. It is DIRECTLY on the waterfront, which makes for a very desirable destination for dining and mingling. The developer is Cresset Harborside Group LLC, the land is owned by the Massachusetts Port Authority, the talented design team is led by Elkus Manfredi Architects with help from McNamara/Salvia, Inc. working on the structure, Cosentini Associates working with MEP, HW Moore Engineers dealing with the site and civil aspects, Reed Hilderbrand Landscape Architects and Childs Engineerings working with the marine. In total the development will have 3 buildings, all 3 being distinctively unique and different, offering a variety of uses to the public.
The East Building is going to be home to Legal Sea Foods, which will stretch up to 18,000 sq. ft. Its sister restaurant Legal Test Kitchen is situated across the street and does extremely well. It will give diners another option from the same restaurant group. This Legal Sea Foods will have plenty of outdoor seating so that you can enjoy the outdoors and the great views of the Boston Harbor.
The West Building stands 50,000 sq. ft. with a new restaurant on the first floor, another restaurant by the name of Zed451 on the second floor that will have patio space for diners and a partially enclosed roofdeck. The third and fourth floors will be home to offices that are yet to be announced. The third building is a Kiosk size structure, reaching just about 1,500 sq. ft. which will also be restaurant space with plenty of outdoor space. The greatest part about this project is the 11,300 sq. ft. of balcony and deck areas, its crucial when you have waterfront real estate that is housing restaurants. Another cool part of this is the new boardwalk and 500 feet of linear dock space for boaters. It is similar to what The Barking Crab does, where you can dock your boat while you eat. I’ve recently been by the site and it looks amazing, its coming along so quickly! I can’t wait to go sit on the patio, enjoy a great meal and then walk less than 25 yards to a concert at the Bank of America Pavilion. I’ve heard great things about Zed451 and am looking forward to seeing what other cool restaurants will fill the other spaces. I will keep you posted on what other restaurants and offices are moving into these buildings. The Seaport is becoming more desirable with each and every project. There are some amazing luxury apartments located directly across the street from this construction. Its luxury living at a great price and its location is flawless!
TO SET UP AN APPOINTMENT TO SEE UNIT AT PARK LANE OR FOR MORE INFORMATION AND PICTURES ON THIS PROJECT PLEASE CONTACT Epapa27@yahoo.com
Pictures
