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The latest news on Real Estate from Business Insider

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    chicago pizza newPORTLAND, Ore. (Reuters) - In Portland's hot real estate market where some homes are getting dozens of offers and bidding wars have sent prices skyrocketing, one buyer found a way to stand out among the rest: Offer free pizza every month for life.

    Donna DiNicola, owner of DiNicola's Italian Restaurant in southeast Portland, might have been joking when she offered the pizza, but it worked.

    Her offer for a 900 square foot (83.6 sq meter) house in southeast Portland for her 23-year-old son was accepted.

    "It was really a joke," she said. "I swear to you I did not know that made it into the paperwork."

    DiNicola, who has been in business for 38 years, saw the Portland market heating up and encouraged her two sons to start looking.

    "I thought, well time is ticking and we've got to get into this market," she said, adding the house was perfect even though it was at the top of their price range after offering $275,000 and two months of free rent for the sellers.

    "Donna's offer was just so compelling and the fact that she offered 60 days of rent back for free, which is practically unheard of," said Holly Marsh, the home seller. "And then the pizza part was just hilarious. It just goes to show they really did something to stand out among the offers."

    Portland houses house suburbs

    Marsh, who has a 5-month-old baby and a son turning four on Thursday, said they might just take up that pizza offer for their son's birthday dinner. Marsh, who designs and sews baby items locally, said the family decided to sell after outgrowing their Portland home.

    The housing market in Portland is exploding as more people flock to the area thanks to national top 10 lists and shows like Portlandia.

    "Everything's going pending in a couple days. Almost everything's getting multiple offers," said Nathaniel Bachelder, Urban Nest Realty listing agent for the loosely dubbed "pizza house." He added housing inventory for March and April was less than two months.

    DiNicola said the minute they walked into the house for her son they knew it was the one.

    "We just went 'wow',” she said, adding she is thrilled to share her pizza with Marsh and her family. "They can have whatever they want."

    (Editing by Cynthia Johnston and Sandra Maler)

    Join the conversation about this story »

    NOW WATCH: Here's the most looked-up word in the Merriam-Webster dictionary


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    colorful houses hillsThe US housing market has been one of the brightest spots of the economic recovery.

    After triggering the great recession through the subprime mortgage crisis eight years ago, the housing market has roared back to life.

    And as Wall Street takes stock of the economy in the first half as we head into the second, many economists are convinced that the housing market is the strongest it's been in years. Moreover, economists think this will be the catalyst that powers the economy going forward.

    In a note last month, Morgan Stanley economists including Vishwanath Tirupattur wrote:

    "Despite a weak first quarter on several fronts of the US economy, the housing sector has been a source of relative strength. In our view, the US housing sector is poised to accelerate into the spring, a traditionally strong period for housing."

    And in a note on Wednesday, the same team wrote, "May was arguably the most positive month for housing data in quite some time, and Monday’s construction spending print was the cherry on top." 

    Screen Shot 2015 06 05 at 12.10.06 PMThe raft of housing data that dropped last month mostly beat economists' expectations and confirmed their outlook for 2015.

    Let's run through Morgan Stanley's assessment of the main data points on the housing market year-to-date:

    • Existing home sales are picking up steam, 6.6% higher for the first three months of this year than the first quarter of 2014. Morgan Stanley notes that all regions of the country have seen growth.
    • New home sales have seen "impressive gains," outpacing growth over the past two years. Also, they are well below their average levels as the housing bubble formed in the years leading up to 2007.
    • Home prices have risen in the first half of the year. Combining the indexes that measure prices, Morgan Stanley estimates growth of between 4.1% and 6.8%.
    • Starts and permits are just slightly higher for the quarter compared to the same period last year (+3.9%). However, the index of building permits, a combination of the tally of permits for new construction and renovations, is up 8%.

    All this comes in a year when economic data has largely missed expectations, the economy contracted in the first quarter, and some experts were on the verge of mentioning the dreaded word: "recession."

    But the performance of the housing market in the first quarter has economists psyched about the rest of the year.

    Deutsche Bank was bullish back in January. And in a note last month with their outlook for the rest of the year, Nishu Sood wrote:

    "Housing demand has been strong so far this year and after a weather affected 1Q15, housing starts look to be back on the growth track as well. Nevertheless, investors remain more fixated on the 8 of 10 failure rate housing has shown the past decade. [Higher] interest rates are a potential risk, but as long as their trajectory remains controlled, we think our positive outlook for US new residential construction for 2015 will be confirmed."

    On Friday, we got more good news about the economy. 

    2534 employmentThe latest report from the Bureau of Labor Statistics showed that the economy added 280,000 jobs in May, much more than the expectation for 226,000. The unemployment rate ticked up to 5.5% from 5.4% (but for the right reasons), and wages are trending higher

    All of this is good news for housing.

    We've seen consistent employment growth in a key demographic that's important for the housing market: the 25-to-34-year-old age group that includes millennials and young families.

    In an email on Friday, Realtor.com chief economist Jonathan Smoke noted that the economy has created 3 million jobs over the last 12 months, and 1 million of those jobs have been taken by this age cohort.

    Smoke explained why this is good for housing:

    "That is the age range for the typical first-time buyer household, which despite its depressed levels in recent years still represents the largest age cohort of home buyers. As that group's economic situation continues to improve, their housing activity follows and has a material impact on both existing and new home sales. With more jobs, more people in the labor force, and higher wages materializing, this spring's strong pace for home sales will continue."

    And the big thing to note here is that home ownership among millennials is quite low — between 20% and 30%, as Morgan Stanley highlights. So even as millennials form families and build homes, they have been more likely to rent houses than buy their own property. In fact, they are more likely to rent most things.

    Screen Shot 2015 06 05 at 2.44.36 PM

    Millennials and young families also pose a big risk to the market's continued strength, even as pivotal as they are for holding it together.

    Here's Morgan Stanley again:

    "Demand for shelter does not necessarily equate to demand for ownership shelter. In fact, as household formations have increased over the past two quarters, the homeownership rate has fallen 70bps to 63.7% (Exhibit 10). To put this number into historical context, we have not seen the homeownership rate lower than this since 1986."

     Still, Fundstrat's Tom Lee wrote in a note:

    "The most important positive inflection in 2015 has been household formation (posting >1.4mm annualized for 4Q14 and 1Q15), which we see as a measure of organic demand for housing. The drivers have been multiple including pent-up demand, labor recovery, and credit score resets."

    Economists and markets are currently looking for the US economy to rebound in the second quarter. And if this bounce back materializes, it will be the housing market that leads the way. 

    SEE ALSO: Here's just about the only bad news in the jobs report

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    Fundrise skyline

    It’s the motto high-net-worth investors live by: Invest in real estate.

    In fact, the famous “Yale model,” which outperformed traditional stock and bond allocations for decades, allocates up to 20% of investment portfolios to real estate. Many people do this by investing in a house — never an office building or apartment building, let alone a skyscraper.

    Why? Though commercial real estate is known as a great investment, historically outperforming stock and bonds, it’s had a high barrier to entry — access has always been restricted to billion-dollar investment funds run by Wall Street.

    Add to that the fact that commercial real estate investing has been riddled with inefficient systems that get passed onto the investor in the form of higher fees and lower profit margins. But the internet has changed everything, and could alter the way we invest in real estate forever.

    Bringing real estate investment to the people

    In 2012, brothers Ben and Dan Miller founded Fundrise, a Washington, DC-based start-up, with one goal: Give everyone the ability to invest directly in the same real estate as multibillion-dollar institutions — online.

    “The idea is pretty straightforward,” says Fundrise president Dan Miller. “Technology allows us to dramatically reduce costs and provide our investors with better returns.”

    Fundrise’s online crowdfunding platform connects individuals with real estate investments in one convenient marketplace — side by side with millionaires. This allows the average investor to build out a real estate portfolio quickly and efficiently, with the opportunity to achieve higher returns.

    In addition to being a more efficient process, lowering the barrier to entry to Fundrise’s platform gives investors access to the most desirable commercial properties in major US cities. For example, today on Fundrise you can invest $5,000 in the development of the skyline-defining 3 World Trade Center — a $2.5 billion deal.  You can purchase a piece of what stands to be one of the most iconic buildings of the century as easily as you can buy a book on Amazon.

    Fundrise Wall St ad

    Fundrise is hoping its crowdfunding technology will do to traditional investment banks and Wall Street what the internet did to the travel, publishing, and taxi industries — make them obsolete.

    Quality over quantity

    The ability to produce strong returns while maintaining quality is not easy. Fundrise says there are 250 new deals submitted through its website each week. Of those, fewer than 1% meet their strict underwriting standards.

    “The introduction of new technology into the process of finding quality real estate investments allows us to cast a much wider net,” says CEO Ben Miller. “We are able to find the needles in the haystack that others can't because of the sheer volume of opportunities we see.”

    Unlike other investment startups such as LendingClub and Wealthfront, it’s not enough for the Millers to make the process more efficient. The company wants to open up an entirely new asset class worth an estimated $9 trillion to 98% of the population who have never invested in commercial real estate.

    For investors, Fundrise's main draw is that it allows them to build build a low-fee portfolio of high-yielding real estate. "This gives me the ability to be in 15 different deals across the country, all from my laptop," says Mesh Lakhani, founder of Future Investor, an online education portal for alternative investments. "I have much better diversification, which reduces my risk. It's part of the income strategy for my overall portfolio."

    Fundrise envisions a future where investing in buildings is as commonplace as owning stocks, where investors can shop an inventory of the best properties across the country without leaving their living room.

    With an investor base of 50,000 and growing, that future doesn’t seem so far away.

    Learn more about how Fundrise is putting Wall Street banks out of business.

    This post is sponsored by Fundrise.

    Find out more about Sponsored Content.

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    Clayton Collins and Wife.JPGOnce upon a time purchasing a home landed at the very top of my bucket list.

    At 25 years old it felt like the next logical step in growing up — a move that would inch my wife, Jessica, and me closer to the American dream.

    From the outside it appeared we were ready for it. We'd built up our emergency fund, paid off our car loans, and started setting aside cash for a down payment.

    We did everything by the book.

    Well, not everything.

    When it came time to pull the trigger on our new home, we completely maxed out our budget — effectively signing ourselves up for months of financial strain, emotional stress and major regret.

    Landing our dream home — $50K over budget

    In 2009 Jessica and I were living in the Dallas–Forth Worth area. At 23 and 24 years old, respectively, we were doing great.

    I was a firefighter/paramedic, and Jessica was studying photography at the University of North Texas while working as a preschool teacher. Together, we pulled in $75,000 — and had zero debt, no kids, and about $25,000 saved up between our emergency fund and retirement accounts.

    house

    We were renting a one-bedroom apartment for $750 a month, but loved the idea of putting down roots and moving into a home where we could eventually raise a family.

    So, with giddy excitement, we began house hunting for properties in the $150,000 to $170,000 range — a number we settled on after plugging our finances into an online mortgage calculator.

    We also decided to look into an FHA loan for first-time homebuyers, which would only require us to make a 3% down payment. I knew 20% was the rule of thumb, but it just wasn't really something I saw other first-time buyers my age doing. Plus, putting down 3% would preserve some of our savings, and I liked having a reliable cushion to cover us in emergencies.

    Two months into our search, we noticed a "for sale" sign on a stunning house just a few doors down from a home we'd just viewed. When our realtor offered to give us a peek on the spot, it was love at first sight.

    The house was enchanting: It was just a few years old, with four full bedrooms, 2,400 square feet, and a lush backyard. We couldn't find anything wrong with it, until we heard the price — $206,000.

    We knew it was well over our budget, but couldn't bear the thought of letting it go. Plus, we'd been pre-approved for a $200,000 loan, which felt like permission to purchase a home of that size.

    In hindsight, I know this was a terribly risky move, but at the time I didn't know any better. And none of our friends or family advised us against buying the home.

    After the closing costs were said and done, the total came to around $207,000. We plunked down $7,000 — and moved in August 2010.

    RELATED: 4 Couples, 4 Home Purchases: How Much Can They Afford?

    house

    Plenty of house, not enough cash

    Although we loved the home, we were instantly struck by our high expenses.

    While our original $150,000–$170,000 price range would have put our housing costs at a manageable 30% of our total income, springing for a $200,000 loan shot that number up to just shy of 50%.

    But we felt confident we could handle the expenses, since I was banking on a steady flow of raises from my employer. (Spoiler alert: They didn't.)

    We'd just have to tighten our belts to sustain our $2,000 housing bills, which included the mortgage, insurance, taxes and utility bills.

    RELATED: Try Before You Buy: I Took a Mortgage Test Run

    That meant some serious lifestyle changes, like declining after-work drinks with friends and passing on the dinner date nights we loved. We couldn't even afford to fully furnish and decorate the place — inviting friends over to an empty house was really tough on my pride.

    Even worse, our new bills put an end to the $250 savings contribution we used to make every month. And forget about retirement — our nest eggs were put on hold entirely after moving into the house.

    In a matter of months, we had gone from feeling financially flush to pinching every penny — a change that put unnecessary stress on our marriage. More and more we found ourselves nitpicking and bickering with each other.

    house

    Over the next nine months, as Jessica and I had many conversations about our decision, it became more apparent that we were being seriously weighed down by the house. We felt stuck, and began to wonder: Had we made a huge mistake?

    About a year and a half after moving in, we made the drastic decision to put the house on the market in August 2012. There was no straw that broke the camel's back — you can only go so long living paycheck to paycheck before you realize that something's got to give.

    RELATED: The Savings Habits of the New Rich: Why You Should Be Living Paycheck to Paycheck

    While waiting for it to sell, we did everything we could to start saving again. We had a feeling we might take a loss on the house, and wanted to lessen the sting. So we began selling our belongings — our boat, TV, cars — and socked away the profits.

    Jessica and I also explored ways of bringing in additional money on the side. She picked up freelance photography work, while I began building websites. All in all, we were able to shore up an additional $15,000.

    We finally sold the house at the beginning of 2013, taking a $10,000 loss. While the hit didn't feel good, the sale took a massive weight off our shoulders.

    house

    Our new life: house poor, cash rich

    Armed with about $30,000 in savings and two travel backpacks, Jessica and I did something even crazier after giving up our homeowner status: We left our jobs — and decided to travel the world.

    For two years we went all over Europe and South Asia, mastering the art of budget travel. We picked up odd jobs teaching English, painting houses — and even herding sheep! I also continued to do some web development work, and invested in a few blue-chip stocks.

    By the time we returned to Texas in the fall of 2014, we had about $100,000 to our names — and were ready for a fresh start.

    Jessica is still doing freelance photography work, as well as running a few photography workshops. And I continue to take on web development projects.

    But, in a strange twist of fate, I also decided to break into the real estate industry. A few months ago, I earned my realtor's license and was recently hired at a national agency. I'm looking forward to helping guide other first-time buyers to find a great house — in their budget.

    Although we're certainly not in any hurry to buy another home, if we ever do I'll definitely be taking my own advice: Buy only what you can afford.

    As you might imagine, living out of a backpack for two years really changes your priorities when it comes to material possessions. Having financial security and a better quality of life now means much more to us than a fancy house.

    In the end, our version of the American dream has turned out to be different from most. But I'm happy that it's ours.

    RELATED: 5 Homeowners Reveal: The Biggest Home-Buying Mistake We Made

    SEE ALSO: The name of your street could affect how much your house is worth

    Join the conversation about this story »

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    Mission housing murals

    For nearly eight hours last week, residents of San Francisco's Mission district stood in line and begged for a chance to save their neighborhood from the wave of tech-gentrification they believe is pricing them out.

    In the end, the Board of Supervisors failed to approve a 45-day moratorium that would have paused development of new, high-priced apartments and condos in the Mission.  

    The city's Board took up another set of highly-charged housing concerns on Tuesday: what to do about short term rentals, such as those popularized by online service Airbnb. 

    This time, the city ended up punting for a month.

    San Francisco is the country's center of innovation, but it is completely stalled over how to handle its housing crisis. Even at a small level, the city is still unsure how to regulate short-term rentals. The planning department deemed last fall's legislation a failure and unenforceable. Of the thousands of units available to rent on Airbnb, only 282 have successfully registered with the city as of May 1.

    Meanwhile, rents continue to be at an all time high. Zillow lists the average rental around $4,225 per month, but because this is San Francisco, even that figure is hotly contested

    In the Mission neighborhood where I live, I personally budget seven parking tickets a month instead of paying for a parking space — not that I can find one on Craigslist anyway. The waitlist for the garage behind my house is a year-and-half for the $350-a-month spots. The murals down the street from me include an eviction map. How's that for culture.

    Mission anti eviction muralWould a decision from the Board of Supervisors today have meant fewer purple dots on the eviction mural? Maybe, maybe not. 

    Mayor Ed Lee has vowed to pour an additional $50 million to buy Mission land for affordable housing — that's if it passed on the November ballot.

    Of Tuesday's two proposals that the city opted not to vote on just yet, one proposal from the Mayor's office puts the cap at 120 days a year for short term rentals and another option set forward by Supervisor David Campos was to limit short term rentals to a max of 60 days a year and compels Airbnb to release its data to the city.

    Tech MissionThe city's own reports on the effects of short term rentals on the housing market are conflicting, and Airbnb has released has its own studies with its own calculations. The only fact that's not up for debate is that rents are too high. We'll have to wait until July 14 to see how the Board of Supervisors chooses to incrementally respond to it.

    SEE ALSO: The fight between Airbnb and San Francisco just got nastier

    Join the conversation about this story »

    NOW WATCH: We Did The Math: Should You Buy Or Rent In These Major Cities?


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    Housing protest in Mission at Jack Halprin

    "Hey Jack, Arkansas wants you," shouted Evan Wolkenstein from the steps of 812 Guerrero St. 

    The crowd of protesters standing in the rain in front of him offered alternatives: Oklahoma, or more realistically, Palo Alto or Mountain View.

    Then the chants started up again.

    "Hey Google, You can't hide. We can see your greedy side."

    Google lawyer Jack Halprin purchased 812 Guerrero Street, a seven-unit apartment building in the Mission District, for $1.4 million in 2012.

    In 2014, he served tenants an eviction notice under the Ellis Act, which allows landowners to push existing tenants out so the buildings can "go out of business" and be converted into condos.

    Wolkenstein, a high school teacher who has lived in the building, is one of those tenants facing eviction, but today wasn't his day to be evicted.

    "Hell no, we won't go. Hell no, we won't go."

    This week, tenant Rebecca Bauknight received a one-page Notice to Vacate that said she could be evicted from her apartment any time after 6 a.m. Wednesday morning. Bauknight has lived in the building for more than 25 years, a neighbor said.

    Housing protest in Mission at Jack HalprinOther tenants in the building recently won an appeal that effectively delayed their evictions from the building, but Bauknight did not join the law suit because of a struggle with mental illness, her neighbors said.

    "It feels great to have time," Wolkenstein said. "The main thing that's so horrible about this is the dis-empowerment."

    "Becky, el barrio está contigo. Becky, el barrio está contigo."

    Outside of the house on Guerrero St., about 50 protestors stood in the rain. Neighbors scurried down their steps into an Uber across the street while one yelled down from the window at the group, which chanted for hours in unison on the rainy morning.

    Housing protest in Mission at Jack Halprin"Even though it's sad, he could have evicted one household to move in," Wolkenstein said, taking a break from holding a sign to talk to Business Insider. "He knows he's evicting someone who struggles with mental illness." 

    "Scott Weiner you can't hide. We are on the tenants' side."

    A police car sat on the corner and watched, but didn't enter to remove Bauknight, who was said to have stayed inside with her dog.

    Meanwhile, the protesters who showed up at Halprin's building Wednesday carried signs with slogans like "Evict Google,""We love Becky," and "This is a community, not a Monopoly board."

    Some were anarchists from Oakland who had traveled across San Francisco Bay. Many were local residents. Conversations revealed that many were in working class jobs, and had stood outside since 6:30 a.m. before they went to work to chant in the crowd.

    Housing protest in Mission at Jack Halprin"He's not getting the message at all," Wolkenstein said. "From the day he walked in the door, he was closed and cruel."

    Claudia Tirado, another schoolteacher and tenant in the building, led most of the chants, before two singers took over for a creative rendition of Hit the Road Jack. Tirado introduced her son who was sad about Bauknight's dog leaving the building. Tirado warned that "Green leads to greed" as she passed around the mic.

    "Hit the road Jack, and don't you come back no more, no more, no more, no more."

    Then, someone on the steps spotted it: "Here comes the Google bus!"

    The protestors turned and raised their fists as it rambled past, its occupants safe from the rain. "Boo!" the crowd hissed.

    Housing protest in Mission at Jack Halprin

    SEE ALSO: San Francisco is in a housing crisis, but we have no idea where to go from here

    Join the conversation about this story »

    NOW WATCH: We Did The Math: Should You Buy Or Rent In These Major Cities?


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    nyc new york apartments

    Low-wage workers are getting priced out of America's biggest cities.

    While some cities, including Seattle and San Francisco, have recently raised the minimum wage to as much as $15 an hour, these increases often are still not enough.

    According to the real-estate firm Zillow, renters on average should be spending about 30% of their wages on the cost of their residence to have enough money left over for other expenses. By this standard, San Franciscans would need to be effectively earning $65 an hour to live comfortably.

    Using rent data from across the country, Zillow calculated what the minimum wage would have to be in various cities to meet that 30% threshold. It found that even $15 an hour would not be enough to cover the median rent in any of the 35 largest metro areas for a single person. Even if two people were contributing to rent, 24 cities would still be too expensive.

    From Zillow's report, we pulled the 11 cities where two roommates would need to earn at least $17 an hour each to afford the median rent.

    San Jose, California

    Median Monthly Rent: $3,287

    Annual Income Needed: $131,480

    Minimum Wage: $10.30/hr

    Minimum Wage Needed, Single-Income: $65.74/hr

    Minimum Wage Needed, Dual-Income: $32.87/hr

     

    Source: Zillow, San Jose



    San Francisco

    Median Monthly Rent: $3,162

    Annual Income Needed: $126,480

    Minimum Wage: $12.25/hr

    Minimum Wage Needed, Single-Income $63.24/hr

    Minimum Wage Needed, Dual-Income$31.62/hr

     

    Source: Zillow, San Francisco



    Los Angeles

    Median Monthly Rent: $2,498

    Annual Income Needed: $99,920

    Minimum Wage: $9/hr

    Minimum Wage Needed, Single-Income$49.96/hr

    Minimum Wage Needed, Dual-Income: $24.98/hr

     

    Source: Zillow, USA Today



    See the rest of the story at Business Insider

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    San Francisco #1 HomesuiteHousing is being attacked from all sides in San Francisco: the short-term rental market may be capped by the city government, while long-term tenants are being forced out of their rentals by owners who want to sell them or turn them into condos.

    Homesuite, a six-month old startup out of Palo Alto, is trying to carve out its niche somewhere in the middle by offering renters something they don't normally see on Craiglist or Airbnb.

    Homesuite only offers furnished, monthly rentals where the minimum stay is at least 30 days.

    It's what allows the company to have an actual broker's license, which could let it steer clear of the regulation pitfalls like Airbnb is currently battling, said its founder David Adams.

    While most monthly housing is geared toward corporations, Homesuite is trying to make it an alternative to long-term rentals and boost the housing supply stock — at least a small amount, Adams said. Furnished, monthly rentals only make up two to three percent of the market in San Francisco, Adams calculated, but making it easy to tap into that could help the housing crunch in the Bay Area.

    "Typically this market is corporate housing," Adams said. "We want to make it something that is accessible to people looking for long term homes." 

    San Francisco #2

    Adams founded the startup after he found himself moving from place to place, crashing in hotels or sublets, and not having many options that had been vetted and were easy to secure. 

    It also fits Adams' personal lifestyle of owning little and moving often. 

    He's in a "Homesuite" of his own right now, but is considering moving up to San Francisco to live closer to his girlfriend. If the commute to the company's offices in Palo Alto proves to be too long, then he can always move back to a different apartment down in the Peninsula. 

    HomeSuite @ Home #2This isn't just another Silicon Valley startup designed for Silicon Valley, though.

    Homesuite wants to make what's typically corporate housing available to people like visiting academics, patients who may need treatments for a few months, or newcomers to a city who are looking to get a feel for where to live without needing to buy furniture.

    "The people in our market, they are very busy," Adams said. "They are not looking for a social experience. They are looking for an easy experience."

    Palo Alto #1

    The easy part does come with a bit of a price hike, which the company openly acknowledges on its site.

    Homesuite takes a commission on the rental, so the prices are higher than if you went through the landlord directly. Some of the landlords they work with are normally corporate rentals, while others are putting their properties up for rent on a monthly basis rather than yearly. 

    The company raised $2.3 million in December 2014 from Battery Ventures, Foundation Capital, Bessemer Venture Partners and the co-founder of GrubHub before it launched in January 2015.

    SEE ALSO: This is what it looks like when a Google lawyer tries to evict a beloved tenant

    Join the conversation about this story »

    NOW WATCH: These New Luxury Planes Feature $20,000 'Mini Apartments' With A Private Bathroom And A Butler


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    vacation home

    Do you dream of owning a vacation home, but find the idea of buying one too intimidating?

    It's actually easier than you may think.

    Here's a guide to help you analyze your options.

    1. Match housing choices to your lifestyle

    Many people assume they must own a primary residence before owning a vacation home, but this isn't a rule you must follow.

    What's really important is matching your housing choices to your lifestyle.

    You may live in a city and want lots of space that you can't afford there. 

    You could rent a modest condo in the city, and buy a large vacation home outside the metro area.

    Or you may live in a large country house and want to enjoy city life as much as you can.

    In that case, you could own your country home and also buy a vacation condo in the city.

    Either way, the financing and tax implications are almost the same.

    chalet

    2. Determine how you'll use your vacation home

    From a financing and tax standpoint, you need to consider how you intend to own and use your property. You have three options:

    • Primary residence. You can buy for as little as 3 percent down (if your loan doesn't exceed $417,000), mortgage rates are the lowest they can be, and you get significant homeowner tax benefits.
    • Second home. You can use your second home any time you want, but lenders won't let you rent the home. Buy for as little as 20 percent down, and qualify for the loan using your full primary residence cost plus your full second home cost. Mortgage rates and tax benefits are the same as primary residences.
    • Investment property. You can rent the home, plus use it when it's not rented. Rates are .25 percent to .375 percent higher than second home rates, and your down payment usually starts at 30 percent. You qualify for the loan using your full primary residence cost plus your full investment home cost, but you can use rental income to help qualify. Tax treatment is less beneficial, but the extra income can help with affordability.

    summer house

    3. Understand the total cost of owning a vacation home

    You can determine what you can afford in seconds. Then you'll find a lender to formally analyze the cash available for down payment, closing costs, and reserves. You'll also calculate the total monthly cost on your existing home (whether you rent or own), plus the total monthly cost on the vacation home.

    You also need to plan for personal budget items that lenders don't use in their qualifying calculations:

    • Gas, electric, cable TV, and internet
    • Furniture and housewares
    • Travel costs to your vacation home
    • Total cost of property maintenance items like cleaning, landscaping, and pool/spa upkeep

    hamptons $850,000 summer rental, hotd

    4. Review monthly and transactional cost line items

    Suppose you live in San Francisco and want to purchase a home in the wine country of Sonoma County, CA for $600,000. Here's how much it would cost as a primary residence, second home and investment property.

    second home costs

    5. Make an offer using a local realtor and lender

    Many vacation properties are in specialized local markets, so it's best to find local real estate agents and lenders. Your real estate agent will clarify local transaction fees, taxes and commissions, as well as advise on local zoning and property rental rules. For example, the town of Sonoma doesn't allow short-term rentals for vacation homes, but other towns in Sonoma County do allow this.

    In destination areas, real estate agent commissions can be higher and can also be seller- or buyer-paid, depending on the area. Only a local expert can advise properly. And, of course, they will structure your offer for you, and negotiate on all facets of the deal that are a priority to you.

    Likewise, local lenders will be comfortable with appraisals and lending in rural areas. Appraisals are more difficult in less populated areas because comparable sales can be old and hard to find.

    If you follow these steps, your closing will be a snap, and you'll be relaxing in your vacation home before you know it.

    SEE ALSO: This woman moved to the US with $8,000 of savings and now owns millions of dollars worth of real estate

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    NOW WATCH: JAMES ALTUCHER: Why investing in a 401(k) is a complete waste of money


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    $5 million is a hefty sum of money to buy a home in any place. But in some locations, that amount of money doesn't go as far as one might think.

    In its latest Luxury Defined report, Christie's International Real Estate broke down the size and type of residence $5 million would buy in the world's most expensive housing markets.

    In London, which has the world's highest-priced residential property per-square-foot, $5 million gets you a lovely two-bedroom flat in a central neighborhood. In Lisbon, Portugal — another trendy destination for the wealthy, but one with much lower overall property prices — that same amount affords a "magnificent villa" in a prime location, according to the report.

    The map at the bottom shows how many square feet $5 million buys in cities around the world.

    real estate christie's

    SEE ALSO: 13 incredibly modest but insanely expensive homes for sale in Silicon Valley

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    house

    Does it seem like everyone around you is buying a home and you can't figure out how?

    Or that buying a home is the next rational step in your life, but there is something (namely, money) holding you back?

    You are not alone.

    There are plenty of reasons why you may not be able to afford buying a home and it isn't necessarily a bad thing.

    1. Renting is more manageable

    People tend to assume that buying a home is always a guaranteed moneymaker and thus more financially prudent than renting.

    However, the decision of rent vs. buy is not that simple.

    The appeal of renting — like lack of maintenance responsibility and expenses, fixed monthly cost, no taxes, lower insurance premiums, and greater flexibility — may be what is keeping you from buying your dream home.

    It's a good idea to weigh the options carefully before deciding what is right for you and your family.

    2. Too many expenses

    Paying for a home is expensive. It is likely the single largest financial decision you will make in your life. Even if it seems like covering the down payment is possible, it's important to calculate the monthly mortgage and see if that is realistic.

    And do not forget about closing costs. These are required at the home purchase (though some lenders allow you to roll the closing costs into the mortgage, this means you pay interest on that additional amount) and often total up to 5% of the home's price.

    Whether due to the recession, high student loan balances or investment performance, you might not have all the money you need upfront to cover a home purchase. If you just can't stomach all these costs, you might not be in the right financial or emotional place to buy a home.

    house

    3. Neighborhood inflation

    It turns out that a lot of homeowners want to live in a neighborhood with a good school system, low crime rate, available transportation, necessity access and cultural attractions.

    Homes in these neighborhoods are going to be more costly, and if you are unwilling to compromise on location, you just may not be able to afford a house … yet. In this case, you may choose to wait until you've saved up enough money for what you really want.

    house

    4. Out of balance

    It's not you, it's the market. The number of households in America is increasing, availability is low and the prices of homes are rising, yet the number of homeowners continues to decrease. This is especially true in certain locations. As a result of the housing crisis and recession, many potential homeowners are choosing to rent because they cannot afford a home or do not trust real estate as a good investment.

    You can see how much home you can afford using this calculator. A big factor in determining home affordability is your credit, so make sure you know where you stand. You can get copies of your free annual credit reports at AnnualCreditReport.com and you can check two of your credit scores for free on Credit.com.

    The most important thing to remember is that if you cannot afford a home, it's not a good idea to buy one. This will usually lead to more financial stress down the road.

    More from Credit.com

    SEE ALSO: Here's the salary you have to earn to buy a home in 15 major US cities

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    Portland houses house suburbs

    The housing crisis hit few people harder than LaDonna Foster. A secretary for the city of St. Louis, Foster divorced in 2007 and soon went into bankruptcy. Two years later she had a heart attack. In the intervening years, her home, which she bought in 2001 for $73,000, fell in value to under $50,000.

    Foster was left paying off her original mortgage along with cascading medical debts. Especially painful was the fact that she'd refinanced her home just before the downturn, effectively adding to her debts. “I always tried to make sure that my home was my first priority, but sometimes you just can’t,” she says.

    Foster defaulted for a second time and to her creditors pleaded for relief. “You have to fall at their feet for mercy,” she recalls. She managed to secure a loan modification, and now she's scraping by.

    But at 48, Foster is an underwater borrower: She owes more on her mortgage than her house is worth. Today, Zillow values her home at $47,825, more than $25,000 less than what she bought it for. Unable to move without taking a heavy financial hit, Foster is stuck paying far more than she should for a home she can barely afford to maintain. 

    The foreclosure epidemic fell particularly hard on segregated North St. Louis County. “It was like a bomb went off in the neighborhood,” says Linda Ingram of Beyond Housing, a St. Louis community development nonprofit. “There are still pockets where it hasn’t come back at all.”

    Despite upbeat housing reports, economists increasingly worry that the communities like those of North St. Louis that were hit hardest in the recession -- poorer, predominantly African-American and Latino neighborhoods -- may have missed the housing recovery for good.

    George Washington University sociologist Gregory Squires sees demographic fissures in the housing market that aren't likely to subside anytime soon. “The narrative that the crisis is over is really premature.”

    The most recent housing data indicate that in many communities, high underwater mortgage rates have become entrenched. Even as housing prices rise for their fourth consecutive year, the decline in underwater mortgages has stalled out at levels that economists estimate is 8 to 10 times the rate a normal market should endure.

    According to a report from housing data company Zillow, the share of mortgages that are underwater notched down to 15.4 percent from 16.9 percent, where the rate had held constant for the previous two quarters. It’s down from a post-crisis high of more than 30 percent, but still far in excess of historical averages. Nationwide, nearly 8 million homeowners are still underwater.

    And the data show sharp disparities in some cities. In Atlanta, 46 percent of lower-income borrowers are underwater, compared with just 10 percent of higher-income homeowners. Nationwide, low-end homes are three times more likely to be underwater than high-end homes.

    The negative equity rate -- the percent of mortgages that exceed the value of underlying properties -- is an important indicator of housing market health. Homeowners trapped in underwater mortgages are disinclined to move. This freezes home sales and makes it harder for borrowers to build equity in their houses -- the primary store of family wealth in the U.S.

    Other effects are not so visible. Debts weigh heavily on household finances, putting a damper on spending and putting investments like college tuition out of reach. 

    Svenja Gudell, senior director of economic research at Zillow, explains that rising home values helped bring millions out from underwater in the past few years. But that trend is fading as home price appreciation slows from brisk double-digit clips to a crawl. “Some homes are actually experiencing home value decline,” Gudell says. “We really didn’t have that before.”

    As the larger housing market plods forward, the communities left behind fit a familiar profile: low-income, nonwhite and struggling with unemployment. Targeted with aggressive loans before the crisis, these neighborhoods are now thirsty for investment.

    The trouble these communities have finding relief reminds some of the postwar practice of redlining, or shutting off black and Latino areas from bank services. “These communities were redlined for decades, and then when the crisis happened, they were ripe for predatory loans,” says Squires. “Now we’re seeing a return of old-fashioned redlining.”

    A report Squires co-authored last year, titled “Underwater America,” pinpointed the 395 zip codes with the highest negative equity rates. In 64 percent of these, African-Americans and Latinos made up at least half the population. Thirteen of the zip codes fell in North St. Louis, including Ferguson, the site of popular unrest last year over policing and racial discrimination.

    Since the report was published in early 2014, the situation in some cities has worsened. In Kansas City, Missouri, 43 percent of low-end mortgages were underwater in the previous quarter, up from 38 percent the year before. In Pittsburgh, the negative equity rate for bottom-tier borrowers notched up 5 percent. St. Louis saw its overall negative equity rate improve, while those in the lowest income brackets sank further underwater.

    The situation may not be as dire as it sounds. For some, being underwater isn’t a pressing concern. Eventually, they hope, markets catch up. “We see homeowners willing to continue paying a $125,000 mortgage for a home that’s worth $25,000,” says Ingram.

    But if home prices stall, the challenges for these communities will grow only steeper. Government support is flagging. The largely successful Home Affordable Refinance Program, a federal mortgage-relief effort, has benefited 3 million homeowners but is open to only some 600,000 more. A patchwork of various other programs has helped, but their impact is limited.

    “There’s going to have to be some policy action because currently there really aren’t any options,” says Zillow’s Gudell.

    In the absence of a policy solutions, the market is settling into a historically novel state of affairs, with wide swaths of American homeowners trapped paying more on their homes than they are worth.

    Foster sees little hope of a turnaround. A foreclosed house down the block just sold for $38,000. “Half of these houses are not worth what they used to be,” she says. 

    Recently, Foster won a principal reduction on her house; her mortgage is now at a more attainable $55,000. Her monthly payments also came down to more manageable levels. But, she concedes, the house remains underwater. “Why sell when you can just live in there until you fall down?”

    Join the conversation about this story »

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    $120 Million ListingThe Upper East Side is in the news for something other than wife bonuses this week

    The neighborhood is home to New York City's new most expensive listing: three identical limestone townhouses on East 62nd Street between Fifth and Madison, available for the package price of $120 million. 

    Sabrina Saltiel and Raphael De Niro (son of actor Robert De Niro), of Douglas Elliman Real Estate, hold the listing for the six-story triplets that extend 73 feet along 62nd Street.

    Since all three units share a cornice line, they've been combined to create the ultimate UES mansion.

    But, as the listing notes, the 30,000-square-foot property could easily be transformed into an embassy, club, or retail space. 

    $120 million listing

    Inside you'll find a whopping 23 fireplaces — some with original mantels — grand staircases, hand-carved wood paneling, an elevator, and, in two of the homes, skylights on the fifth floor.

    Combined, there are 11 terraces, two of which are double-tiered and located on the rooftop. 

    $120 lisiting terrace

    Breen & Nason Architects built the townhouses in 1879, but they were restored just recently, in 2001, by Joseph Pell Lombardi Architects. 

    Saltiel told The Wall Street Journal that the triplets all belong to the same entity, but she kept mum on the name of the owner

    It's rumored that the properties are linked to the Safra banking dynasty. 

    $120 million listing

    The current resident also owns the $35 million brownstone that's for sale next door. While it can't be combined with the triplets, the 9,520-square-foot space would serve as a perfect guesthouse.

    SEE ALSO: The most expensive apartment ever sold in downtown Manhattan is back on the market

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    hudson st nyc greenwich village

    New York City is notorious for its high rent prices and competitive housing market. Good location, affordability, and space — anyone who's navigated the delicate process of finding an apartment knows that in most cases, you can't find all three of these qualities for your new home.

    Real estate website Zumper crunched the data from the listings on its site to determine the most expensive and the cheapest neighborhoods to rent in Manhattan and Brooklyn this spring.

    Zumper looked at neighborhoods primarily in Manhattan and Brooklyn, and a couple in Queens. It's worth noting that they didn't look at the Bronx or Staten Island. Already from March to April of this year, Zumper noted an increase in median rent prices across the city.

    These are the most expensive neighborhoods to rent in New York City this spring: 

    1. Tribeca ($4,450)

    2. Chelsea ($3,920)

    3. Greenwich Village ($3,850)

    4. DUMBO ($3,720)

    5. Gramercy Park and the West Village (tied at $3,700)

    6. Battery Park and the Financial District (tied at $3,580)

    7. Soho ($3,500)

    8. Garment District ($3,480)

    9. Upper West Side ($3,400)

    10. Midtown East ($3,330)

    Check out Zumper's infographic below for complete data:

    NewYork_MonthlyPriceMedianMap_Spring20151

    If staying in Manhattan is important to you, the best bet for affordable housing is in the Lower East Side ($2,450), the Upper East Side ($2,730), and the East Village ($2,800).

    However, all of the top ten most affordable neighborhoods are in Brooklyn: Although rent prices are the lowest here, median rent is still on the rise (for the most part) in Brooklyn, as elsewhere.

    Here are the most affordable neighborhoods to rent in New York City this spring:

    1. Ocean Hill ($1,380)

    2. Maspeth ($1,430)

    3. Canarsie ($1,480)

    4. East Flatbush and Sunset Park (tied at $1,500)

    5. Flatbush ($1,530)

    6. Flatlands ($1,550) 

    7. Borough Park ($1,570)

    8. Kensington ($1,600)

    9. Brownsville ($1,650)

    10. Crown Heights ($1,800)

    Below is Zumper's infographic with median rent prices in Brooklyn for spring 2015. Brooklyn_MonthlyPriceMedianMap_Spring2015

    SEE ALSO: The 15 most expensive streets in America

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    working from home

    There are currently over 15.3 million self-employed people in the United States.

    I know their trials and tribulations.

    Getting into real estate from a teaching background has taught me more about budgeting, saving, and being disciplined and resourceful than I could've ever imagined.

    The idea of making your own hours, at first, seems like the ideal work situation for anyone.

    Who wants to be that corporate American robot working from 9-5 everyday?

    You think about the flexibility in scheduling, all the nice houses you're going to sell, and all the commission you're going to make.

    Then … you get a rude awakening.

    Structure and discipline: The wake-up call

    The hardest thing for me going from the teacher waking up at dawn everyday to review lesson plans to running my own business was the shift in structure, or rather, the lack thereof.

    I quickly realized that the daily routine I was so accustomed to was actually nonexistent.

    After all, being an "independent contractor," you don't ever have to go into the office if you didn't have the need. With that being said, I had to quickly create a routine for myself that actually became the equivalent of a 9-5, and I soon realized that I no longer had any weekends as well.

    Although I chose to work with one of the largest firms with all their glitz and resources, it was even harder than those lesson-planning days, as I had become my own boss overnight. And really, from here on out, I was going to get out of this business whatever I put into it. The first thing my "mentor" at my new firm said to me was,

    You have a great amount of potential, but you need to plan your work, and work your plan.

    This was definitely not as easily done as it was said. You learn promptly in this business that you really have to make that run for your next paycheck, as it becomes like a capricious woman. It was fortunate that I did have a lot of savings from my teaching days because it would be a little while before I saw that next check.

    Starbucks Drinks

    The first lesson I learned: Budgeting and saving

    The first thing you learn, rather quickly, is how to budget, as those once consistent paychecks become just a fossil of a memory. Your daily Venti Chai Latte from Starbucks quickly becomes a regular cup'o joe at the office. That extravagant palatable brunch you used to enjoy becomes granola bars and work related luncheons.

    You learn to take up that mortgage broker who wants to teach you about the mortgage process & getting pre-approved on his lunch proposal. How about that woman who works for the title company who wants to go over how the title procedure plays into your work?

    "Yes, of course I'm available for another lunch date."

    You learn to take advantage of the discounts in the area of which you work, as a lot of places offer "x" percentage off to employers of the same plaza. You learn to sign up for the lunch-and-learns and learn which office meetings will have catered lunch.

    Some of the bigger firms are affiliated with cellular phone companies and offer discounts for their services: another 10% off your phone bill. Working for a big company definitely has its perks.

    As a realtor, you probably do more driving than a NASCAR driver. Gas consumption becomes rather exorbitant between showing properties and getting around to meet your clients on a daily basis. Aside from the fact that I own a hybrid, I became very cognizant of this and started to route my drives to fill up at the cheapest towns.

    business woman airport

    Being resourceful — Work smarter, not harder

    There is a myriad of apps out there now with the tech start-up community doing what they do best and everyone thinking they have a shot in Silicon Valley. All jokes aside, take advantage of all the resources that are available to you right at your fingertips- they really do try to make your life more convenient!

    I found that a few of the most important tools that have aided in the start up of my business were the ones that helped to organize my finances, to keep track of all my clients, and to market.

    Everybody knows Dropbox for their storage and synchronization capacities. Although I have a digital filing process through my company, I also back up all my transactions and clients' files with Dropbox in the unfortunate case anything happens to my paper files or through the work platform. But in this digital age, who's really lugging around paper files? Don't be that old agent lugging around that 20-pound briefcase full of paperwork, it's passé.

    Although your company will have syndicates with other real estate sites, I found social media to be a powerful tool as well, especially when you're just starting out and trying to let people know you are in the business. Facebook, Instagram, LinkedIn are all your friends, and they're free. Additionally, some may think that snail mail is antiquated, but there is still importance of mailers in the marketing department.

    As an independent contractor, you have to be very conscious of the taxes that you may end up owing & need to allot for this. You will get in the habit of saving all your receipts, as some of the many perks of the job involve tax write offs.

    I started using Expensify to organize and to track all of my receipts. This eliminated the need for me to carry around a stash of receipts, of which of course I did in the beginning.

    Networking fears

    Learning the power of networking

    Pre real estate, every event was more of an opportunity to catch up with friends and family, but as the CEO of your own real estate business, every event swiftly becomes an occasion to meet potential clients and to push out to your sphere of influence. I've found myself attending more events this past year than Kate Middleton attends balls, finding some way to pass out as many business cards as possible and to talk about real estate as much as I feasibly can.

    Networking with the right people and getting out there to attend those events are key in a referral-based business. With all the marketing fees that you may pay for out of your own pocket even at a larger firm, events really serve as free marketing opportunities for the new agent.

    wine toast party

    Counting the blessings

    Work in real estate has been a blessing in disguise. The initial months were definitely trying, as one wonders why they've gotten themselves into such a state, but as I've grown busier, I can say that it's been truly rewarding as I've disinterred my potential.

    Retrospectively, I can pinpoint all the actions that have led up to this moment of constantly being on the phone with attorneys, staging houses for new listings, and setting up showings for my buyer clients. I've become the best version of myself as the CEO of my own business than I could've ever imagined. I've learned to organize, to budget, to save, and to be resourceful: utilizing every resource and opportunity I can get my hands on with much discipline and tenacity.

    These are all lessons that I feel one can apply to every aspect of his or her life, and although I am still newer in the business and not quite yet near my ideal mark, I can truly say that I am successful today and am well on my way to perpetuate my name and my business. With that being said … anyone looking for homes?

    SEE ALSO: More people are skipping the office and working for themselves instead

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    house

    The year was 2001. I was 21 years old, with one semester of college left.

    I wasn't taking school very seriously anymore, so me and my roommate were going through cases of Natural Light beer every week.

    While I was having fun celebrating the last days of fraternity life, I was also looking forward to the next stage of my life — a nine to five job I had accepted in Madison, Wisconsin.

    After graduation I made the move from Illinois, settling into a run-down studio apartment in a seedy neighborhood. It was cheap at $425 a month, but I was so broke I had to borrow the security deposit and first month's rent from my mom.

    Nevertheless, I was excited because I'd finally be making adult money. Here's my very first paycheck:

    first paycheck

    With good money coming in, I decided to buy a new car because I was embarrassed to pick up dates in my 13-year-old Chevy Celebrity that was rusting everywhere. Looking back, I realize I was following the life script that was ingrained in me: get a college degree, land a nine-to-five job, and buy a new car.

    One year later my apartment lease was up, but I chose to renew even though my finances had stabilized and I could afford a nicer place (people were smoking marijuana and playing dice in the hallways). The following year I found a better job, and moved downtown to an upscale 650-square-foot apartment with a lake view.

    But a swanky apartment wasn't enough; to show everyone I was successfully navigating adulthood, and to keep on track, I needed to buy a house. So I saved for a down payment, creating automatic monthly transfers of $1K from my checking account to an online savings account. That put the money out of reach so I couldn't spend it. Three years later I had saved $40K, enough for a 20% down payment on a $200K house.

    It's now 2006, and I was 26 years old, ready to achieve the American Dream of buying a house. I signed over all my hard-earned money, and that was probably the worst financial decision I've ever made.

    living room

    Recently, many people have emailed to say, "I finally have enough money to buy a house," or "I've lived in an apartment for 10 years, it's time for me to buy." Like those people, and probably you too, I thought I was making the best decision to buy, but I hadn't done any homework, or the math.

    I naively believed:

    • Renting is just throwing money away
    • A house always appreciates in value, so it's one of the best investments for the money

    It was my own fault for not becoming an informed buyer, but I also felt the social pressure:

    • Buying is the next step in the life script, after a college degree, a nine to five job, and a new car
    • Our parents tell us we should be buying
    • Our friends are buying, and they're asking us when we're going to

    As it turns out, what I believed about buying was flat-out wrong, and because I didn't do the math for the biggest financial decision of my life, I'll eventually realize two losses — the property selling for less than what I paid, and the potential profit from putting the $40K to work for me.

    houses wisconsin

    Belief #1: Renting is throwing money away.

    The Times has a beautiful calculator to help determine if it's a better financial choice to rent or buy, and I think it's a great litmus test to steer you in the right direction.

    But the issue I have with that calculator is it doesn't factor in the soft costs of owning a house:

    • Your time. Just like money, time is a resource, and you'll spend it: researching problems with your appliances, calling electricians and plumbers, and then waiting around for them, fixing small issues with hand tools, taking trips to the home improvement store, mowing the lawn, removing snow, etc.

    If we reasonably assume our time is worth $20 an hour, and we'll spend 8 hours a month on those things, that's $2K a year in labor that renters save.

    • Reduced flexibility. It's way more difficult to move for a better job, and that job could be across town — a longer commute you don't want — or in a different city. Either way, you won't make the best decision for your career because you become financially, and emotionally, tied to your house.

    Plus, with a house you're still throwing money away; keep your checkbook open for property taxes, homeowner association fees, maintenance, replacing things when they break, and then break again, replacing the roof, and keeping it up-to-date. You can figure to spend up to 50% of your mortgage payment on those things.

    wisconsin house

    Belief #2: A house is the best investment.

    Historically, it's a bad one.

    The mistake people make is when they hear someone say, "I bought my house in 1987 for $230K, and today it's worth $1M," and then think a profit of $770K over 28 years sounds pretty good.

    But if we calculate the compound annual growth rate over that timeframe it's 5.39%. The stock market — the S&P 500 — returned 10.45%. Here's what that 28-year difference looks like:

    Mr. Everyday Dollar chart

    Housing has always had a terrible track record as an investment — from 1890 to 2012, the inflation-adjusted return (i.e. taking inflation out) on residential real estate was 0.17%. That means a house purchased for $5K in 1890 would be worth $6,150 in 2012.

    Over the same time period the stock market returned an inflation-adjusted 6.27%. That means a $5K investment in the market would be worth over $8M. That's called the opportunity cost — when you choose to use your money one way, rather than another.

    SEE ALSO: Here's the salary you have to earn to buy a home in 27 major US cities

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    Tavern Island 1

    Considering the fact that New York City townhouses go for tens of millions of dollars, and luxury condos are climbing into the hundred million range, $11 million for an entire private island and mansion seems like quite the bargain.

    Tavern Island is a 3.5-acre piece of land located in the Long Island Sound near Rowayton, Connecticut, overlooking NYC.

    According to the Daily Mail, in the 1950s and '60s, theater impresario and lyricist Billy Rose owned the island and hosted lavish parties for the likes of Marilyn Monroe, Maureen O’Sullivan, and Barbra Streisand.

    In addition to these epic bragging rights, the new owner of the island will gain a six-bedroom English Colonial mansion dating to 1900, private beach, swimming pool, and a docking area and boat for access the mainland.

    Tavern Island 2

    Tavern Island 17

    Tavern Island was settled in 1651 by the colonial English, making it through the British invasion of Norwalk, CT in the Revolutionary War. It later became a key landmark for harbor pilots, guiding their vessels to land and serving as a spot for captains and crews to enjoy a celebratory drink, hence the name Tavern Island.

    The property still has an antique canon that is pointed out to sea.

    Tavern Island 3

    Tavern Island 11

    The 6,100-square-foot main house was constructed in 1900 of native stone and other local materials that were carried to the island over frozen waters by oxcart, according to Private Islands Magazine.

    Tavern Island 5

    Tavern Island 9

    The three-story house boasts six bedrooms, two offices, a gym, and a steam room. The stone carries through to the interior, adorning fireplaces and certain walls. All of the rooms have spectacular views.

    Tavern Island 12

    Tavern Island 13

    The property offers a two-bedroom cottage, which originally served as a home for the harbor pilot and was later rented by writer Lillian Hellman.

    Additionally, there’s a two-bedroom boat house with game room and workshop, a one-bedroom tea house with a meeting room (pictured above), and a large three-car garage.

    Tavern Island 14

    Tavern Island 15

    But of course it’s the meticulously landscaped grounds and outdoor perks like a fire pit, private beach, and 25 x 75-foot swimming pool that make this island truly one-of-a-kind.

    Tavern Island 19

    To get to the mainland, a boat at a private dock shuttles passengers.

    The current owners have lived on Tavern Island for the past 30 years and went to great lengths to preserve the historic compound as well as update it with modern conveniences like city water and electric, an on-site generator, and an 8,000-gallon fuel oil tank.

    And since the island is just an hour drive to Midtown, this seems like the perfect alternative to the Hamptons.

    Considering the entire island is one tenth the price of Manhattan’s One57 penthouse, we want to know your thoughts on the value.

    SEE ALSO: This secluded Maine estate is a steal at $9.5 million

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    kitchenHip-hop icon Michael Diamond, aka Beastie Boy Mike D, has gotten a lot of attention for his impeccably designed Brooklyn home. 

    Back in 2013, news that Diamond and his wife, filmmaker Tamra Davis, had acquired the townhouse on a beautiful tree-lined Cobble Hill block and given it a creative and modern — yet totally livable — redesign led to a spate of articles showcasing the cool and quirky pad, including a New York Times house tour aptly titled “Licensed to Grill.”

    All the attention likely led to Diamond’s recent side project helping his architect friends design a new-construction townhouse in nearby Boerum Hill that recently sold for just under $5 million.

    Now the original Cobble Hill Beastie house at 148 Baltic Street is on the market for $5.65 million, funky custom toile wallpaper and all.

    148BalticLR

    The four story, five-bedroom townhouse epitomizes the carefully-considered contemporary-meets-historic aesthetic.

    In the Times interview, the couple explain how Diamond got over his disdain for the outer borough (he grew up on the Upper West Side) and some of the choices that were involved in renovating the 3,200 square-foot four-story Italianate brick home, built in around 1853.

    The renovation enhanced the home’s many original details like the marble mantel and wood-burning fireplace in the living room, crown molding and wide plank wood floors. 

    Juxtapositions like the “bug” cabinet from Studio Job alongside these historic details illustrate how easy it is to add new life to what came before—though we’ll assume the cool designer furnishings won’t be included in the sale.

    148BalticKitchen21

    The sleek, modern wood-and-white-Carrara-marble kitchen opens to a large deck, perfect for the aforementioned grilling.

    Stairs lead to a verdant backyard with a patio and plenty of room for kids to play. In the kitchen, hanging glass shelves were custom created by a local metalworks shop, ESP Metal Crafts in Bushwick.

    148BalticMaster

    148BalticMasterBath

    The full-floor master suite, which includes an enormous master bath, was moved to the top floor for privacy; the ceiling was opened up to create a loft-like space and bring in light.

    Luxurious additions include a spacious dressing room and a freestanding tub, a steam shower and a skylight in the bath.

    148BalticKids1

    148BalticOffice

    The children’s bedrooms (the couple have two school-age sons) combine eco-chic with fun design like chalkboard paint on the bathroom walls to encourage creativity.

    There’s also a home office and a study den on this floor.

    148BalticMediaRoom

    148BalticYard

    On the ground floor is a cozy screening/media room which has functioned as command central for creative projects as well as a family gathering spot.

    Super-trendy Brooklyn wallpaper company Flavor Paper collaborated with Diamond and Vincent Ficarra of Revolver New York on the award-winning Brooklyn Toile wallpaper, which you can now buy.

    In a small auxiliary kitchen, durable, down-to-earth details like reclaimed wood cabinets and subway tile add warmth.

    Tall glass doors bring in light and open onto the patio. The cellar holds a washer/dryer with plenty of room left for storage.

    148BalticSecondKitchen

    The house boasts modern upgrades like new mechanicals and central air.

    Though it is currently used as a single-family home, it’s officially a two-family dwelling; the second full kitchen and bath on the ground floor make it ready to collect rental income.

    No word on what’s next for Diamond, but we’re sure he’ll get respect. Check out the gallery below for more eye-catching design details.

    [Listing: 148 Baltic Street by Amy KatcherLeslie Marshall and James Cornell of The Corcoran Group]

    SEE ALSO: Robert De Niro's son nabs record-breaking, $120 million NYC listing

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    Tyler Perry Home

    Tyler Perry is an actor, screenwriter, playwright, director, producer, and, last but not least, major real estate collector.

    Although he just listed his palatial Atlanta mansion for $25 million, he still has a $62 million estate, $3.6 million chateau, and $7.6 million pied a terre — and that's just in the state of Georgia. 

    Josh Reeves and Chase Mizell of Sotheby's International Realty hold the listing for the seven bedroom behemoth that just hit the market. 

    Sitting on 17 acres of private land, this 34,688 square-foot mansion has it all.



    Built in 2007 along the Chattahoochee River, it's described as "the most compelling private residence to ever be offered to market in the history of Atlanta."



    Winding bike trails let you explore the great outdoors without ever leaving the property.



    See the rest of the story at Business Insider

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    QueenIt’s no Buckingham Palace, but it’s rather special anyway.

    Even the British royal family is getting into the business of pieds-a-terre in New York. 

    Queen Elizabeth II is now the proud owner of an apartment at Zeckendorf Development’s 50 United Nations Plaza.

    The royal family spent $7.9 million on the three-bedroom pad.

    The unit includes 3.5 bathrooms and spans roughly 3,000 square feet, according to the listing on StreetEasy.

    The unit would serve perfectly as a getaway for the queen’s grandsons, or maybe even as her own getaway. Only, of course, if she decides to resign and hand the rei(g)ns to her son Charles.

    Norman Foster designed the building. The starchitect was knighted by the Queen in 1990.

    SEE ALSO: Robert De Niro's son nabs record-breaking, $120 million NYC listing

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