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10 Tips for City Renters Dreaming of Buying Country Homes

By Amy Zimmer | October 20, 2015 6:10pm
 A growing number of New York City renters are buying country homes, brokers said.
Tips for City Renters Buying Country Homes
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MANHATTAN — After 30 years of renting on the Upper East Side, Nancy Snell and her husband bought a summer house this year: a one-bedroom co-op in Westhampton Beach on Long Island.

It took three decades to find "the right thing that my husband and I could agree upon," which was also "manageable and affordable, Snell said.

"You don't even have to put your shoes on to go onto the sand. I like to call it a pied-a-mer," she said of the area where one-bedrooms are currently listed from $259,000 to $669,000.

New Yorkers have long been buying second homes while renting their main residences. After all, nearly 70 percent of New Yorkers rent.

But real estate brokers say they're seeing a uptick in the number of renters buying country homes, especially since more families are being priced out of the city's hyper-competitive market. They still want to take advantage of historically low mortgage rates, so they look outside the city.

"We have seen a huge demand from New Yorkers looking to purchase homes in markets outside of the city," said Kathy Braddock of William Raveis Real Estate, whose newly launched "Raveis Escapes" division targets this population, with the firm's city office acting as the conduit to more than 100 sister offices in the Northeast. "For someone in a rental whose budget is $200,000, there are cute little cabins within 2 hours from the city. They're not in the Hamptons, of course, but they are little sweet places that provide what people want: a getaway."

For renters, who dream of owning a country house, here are some things to consider:

1. What do you want in a country house?

"There is a 'wish list,' a 'want list' and a 'must-have list,'" Braddock said.

Is it more important to live near a golf course or lake? Do you want a house so your kids can have a backyard or so you can have a great kitchen for entertaining? she asked.

For partners or spouses, she stressed, "You both have to create these lists and somewhere in between they have to merge."

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2. What are the extra costs?

Besides your mortgage payments, you will have additional expenses, like taxes, fuel costs, snow removal and lawn care, to name a few.

Taxes can vary widely from town to town, noted Jennifer Grimes, a New York City transplant who founded Country House Realty, serving the Catskills' region of Sullivan and Ulster counties.

The town of Neversink, where the city's drinking reservoir is located, for instance, has extremely low taxes. Towns that are home to many nonprofits that are not paying taxes, on the other hand, may have higher property taxes.

"Be aware of your annual costs," Grimes said. "You never want your second dwelling to be a financial burden. Try to buy below what you have, so you have money for unforeseen events."

You will also have to figure out how you will maintain the house in all kinds of weather: will you hire someone to help or use new technology to manage some things remotely?

3. How will you get there and how long will it take to get there?

Many buyers want to travel less than 2.5 hours if they plan to go up every weekend, said Braddock. She also asks clients about their tolerance for traffic and whether they want to avoid bridges and tunnels. (That would put New York and Connecticut higher on the list than New Jersey.)

"If you only have one car and you don't both go together, then someone needs to take a train or bus," Braddock added.

4. How far is the closest grocery store?

New Yorkers are spoiled with corner delis and grocery stores, open at all hours, so it's important to find the closest place where you can buy a quart of milk, Braddock said.

5. What activities does the town offer?

Read the local newspaper, talk to local shop owners and go to parks and pubs to find out what the vibe is like, brokers advise.

There are hip areas in the Catskills, like Narrowsburg (where locals made T-shirts joking "Narrowsburg, not Williamsburg") and the up-and-coming Livingston Manor, where the Catskill Brewery recently opened, Grimes noted.

6. Can you make money by renting out your country house?

Increasingly, owners are renting out their second homes to help cover their costs.

But they should understand whether their space is "the type of property that resonates with the public," in terms of décor and amenities, suggested Grimes, who also runs a vacation rental company Red Cottage Inc.

Her firm nets owners anywhere between $8,000 to $60,000 a year, but she noted that many counties require you pay a room tax, which means you have to keep track and file such transactions. You also have to deal with cleaning and upkeep and being OK with strangers using your spatulas.

"You can usually cover your taxes by renting it and still using your house yourself a lot," Grimes said.

7. Can you pool money with friends?

More and more, groups of two or three friends are coming to discuss the possibility of buying a second home together, Braddock said.

"It makes it very affordable to go in together rather than spend $10,000 on a vacation," Braddock said, "But I always tell people it's easier to buy together than get out [of the joint ownership]."

She advises such groups to speak with a lawyer first to understand how to structure the ownership and deal with such events like a sale, rift or death.

8. Can you get tax breaks for your land?

If you want lots of land, there are ways to get more bang for your buck — so long as you commit to preserving space.

A conservation easement allows owners to get an income tax deduction for promising not to subdivide their land for further development, explained Connecticut-based Raveis broker Stacy Matthews.

"If you don't need more than 10 acres and it's a 30-acre property, by the time you do conservation easement you'll get several hundred thousand back," she said.

There's also a "farm exemption" where you can get a property tax reduction based on the amount of land you farm or promise to keep undeveloped for 10 years, she said.

9. Do you have cellphone service?

Make sure you have cell service, Braddock advised.

"There are so many communities that don't have cell phone service," she said. "That's even true in the Hamptons."

10. Consider renting before buying.

Make sure you like the town before you decide to make a big investment, Braddock advised.

"I am a firm believer in renting first to see if you like going out every weekend," she said. "The reality is: for some people, it's just like, 'Let's go to an inn and get this out of our system.' It's a costly mistake if you really don't like the community and having a house."