Q & A with Barbara Corcoran

---

Q1 - My small home is in a good location of Silicon Valley in Northern California, but it's only a one story 2-bedroom, 1-bath of approximately 1,050 sq ft.  Many one story homes in the area have been torn down to build two story homes, but I don't have the space or the money to add a room let alone rebuild. I am thinking of remodeling the bathroom to create a double sink by combining the separate tub and shower. Will this help for resale?

A - You're smart to remodel the bathroom. Along with a new kitchen, bathrooms are the best way to increase the value of your home when you go to resell. But don't spend too much money and before you start, go out and look at model homes to see what kind of cabinets and finishes are selling best. Since you're in a good location, there should always be demand for houses of all sizes and if you can't compete on size, make yours a jewel box that will entice the next buyer.

---

Q2 - My husband and I purchased a piece of land last year in Lehigh Acres, Florida, for a very good price but it's not in a very good area (lots of crime, foreclosures, etc.).  With the economy the way it is my husband thinks the area will only get worse and wants to sell, but I feel that the area will eventually pick up and that this is a good investment. What do you think?

A - The fact is you'll have a tough time selling it. There's not much of a market for land right now because of the credit crunch. Very little new development is taking place and there are too many newly built homes without buyers. You should hold the property and wait this rough spot out, as long as you can afford to carry it. You'll do much better later once the market recovers than you can do now.

---

Q3 - I own and live in a brownstone and also have a condo investment in Carroll Gardens, Brooklyn. The condo rents for $1800/ month, is worth about $500K, and my remaining mortgage on it is only $20K.  My wife wants me to sell the condo and buy a 2-family house in Rockaway Beach which go for about $600-$700k, renting one unit and using the other for a vacation house.  She is also willing to sell our brownstone to move to the beach full-time. I feel this is not a good idea because the condo is easy to maintain, whereas the Rockaway property will give me a mortgage and the responsibility of a tenant 45 minutes away.  What do you think we should do? 

A - Keep the condo in Carroll Gardens which is much closer to Manhattan where you have a more reliable and profitable rental pool. Since Rockaway Beach will be a more seasonal market, you'll get enough for a summer rental but not as much for a yearly rental. Seasonal rentals are more work and more wear and tear on the home, as well. But if your wife wants to move, you better make her happy or you'll be miserable no matter where you are. You two have done well with your investments, so if you just want a vacation home a few months a year, go and rent one!

---

Q4 - I saw a gorgeous garden apartment, but it has not sold and the price keeps coming down. The other apartments in this building have sold, including those on the second and third floors whose view is the back of other buildings. I asked my real estate agent if garden apartments are not desirable and she said she did not know. The idea of having a garden and great outdoor space in Manhattan is something I find exciting, but I'm worried about resale value. 

A - If you love it, go buy it at a great price and get the most out of the summer! Outdoor space is a wonderful amenity and there will always be other buyers like you who will want a garden of their own in Manhattan so don't even worry about resale. Just be sure that the apartment is safe. Since it's on ground level, you may want to invest in a security feature like window bars or an alarm system.

---

Q5 - I am considering buying vacant homes, fixing them up and renting them through Section-8.  Is this a good idea or too high risk?

A - Real estate is always risky, so you need to be smart and make calculated decisions. Learn about your particular market and gauge the demand for rental properties and what they're really going for. Then run the numbers for the cost of buying and fixing up a home to see if it makes financial sense. If it does, don't be a hog and start with one house to minimize your risk. As for Section 8, that is demand driven - if most tenants in your area require a subsidy to rent, then go for it. But if you can rent directly to tenants at market rate without the hassle and red tape of two rental streams, then do that instead. Either way, screen your applicants carefully to make sure they'll be responsible tenants who will pay their rent on time. Don't bother to call their current landlord as a reference but do call their previous landlord. If they're a bum tenant, their current landlord will lie to get rid of them.

---

Q6 - Where can I check the property tax value on my house in Astoria, Queens?

A - Go to the City of New York's website at www.nyc.gov/html/dof/html/home/home.shtml and click on "Bills, Notices & Assessments" under the Property heading. This is a quick and easy way for New Yorkers to find out what you owe, how much you've paid, and other important property information.

---

Q7 - Most military families stay at their homes for four years or less and even four years is rare! What advice do you have for military families, buy a home or rent?  Bear in mind the military does provide a housing allowance but they don't care if you're upside down in your mortgage at the end of your tour. Also, if you rent, is it unreasonable to ask the owner for a credit report to be run?  How do you know they are not foreclosing on the very property they are trying to rent out?

A - Stick to renting as there's just too much risk in buying a home for such a short period of time. You can't be sure you'll get your money out or even be able to sell in the first place. If you can't find a home on base, then use your housing allowance to get the best rental you can, and pay a bit more to get a nicer place that you and your family deserve. If you ask a landlord  for a credit check, they'll shut the door and go to the next family in line. Instead, you can check local property records to see if there are pending liens on the house before you sign a lease.

---