Real Estate Investing

Although it wasn’t my idea and it probably won’t happen, I kind of like the notion of turning Michael Jackson’s Neverland Ranch into a tourism spot. Dude was $300 million in debt and has three children who should be cared for.  So why not?

Why not is the locals don’t like the idea AND it’s zoned for agricultural use - not commercial.  If the local community fights a zoning change proposal, the zoning will not change. According to Business Week,

Locals say it is highly unlikely Barrack or the Jackson family could get permission to build a Graceland-like tourist attraction at the site, however. (the article continues later…)  … the largely wealthy area residents have no interest in opening more of their valley to John Q. Public. “It would depreciate our property to have that carnival,” he says. “It’s not that type of place. It’s very stable. There’s not a lot of mobility.”

A lot of areas would welcome the tourism dollars, but this appears to be a fairly wealthy community so that type of tourism boost is unnecessary.  However, it seems like another idea is to dismantle NeverLand and ship it to Las Vegas.  Or Gary, Indiana.  Both would work well for those towns that are certainly NOT recession-proof.  What a great boon for their economies!

Speaking of Gary, Indiana… isn’t it ironic that superstar Michael Jackson is from there, as well as recently deceased Karl Malden.  I feel badly for that little community for losing two of its icons in the same week.

I recently read on a media site about what we need to do in order to restore consumer confidence.   Of course they were talking about restoring confidence in real estate.  In the past Realtors were always rated at the top of trusted salespeople, but lately our numbers have been slipping.  Vince Leisey, President, Prudential Ambassador Real Estate recently said,

To begin with, I think we need to recognize that consumer confidence fell for a variety of reasons that had nothing to do with our ability as sales professionals. Consumers lost faith because as home prices dropped, equity was eroded. At the same time, unemployment was going up as the stock market was tanking.

I don’t think it’s consumer confidence in Realtors that needs to be restored, however.  I think it’s consumer confidence in the economy that has caused the plunge in our real estate recovery.  With jobs disappearing, people just don’t feel safe about making a major purchase - whether it’s homes, cars, appliances, furniture, or whatever!

In fact, Business Week published an article today that said although job losses were lessening, the recovery will remain slow.

Most employers either don’t need more workers or can’t afford to hire them. Even after business starts to pick up, they will hold off as long as possible before adding to payrolls, economists predict. As if that’s not bad enough for the unemployed, the competition for jobs keeps increasing because population growth adds about 1% to the labor force every year. Factor in that labor productivity has been growing at roughly 2% a year—meaning companies can produce the same output with fewer workers.

With a long, drawnout recovery predicted by economist, restoring consumer confidence may be years away.  Meanwhile, the best thing to be done by the public is to be choosy about your Realtor.  Expect them to perform professionally and in an informed way.

Cartoon from here.

PUDs are one of those weird real estate terms that most people pay no attention to.  But on one of the latest disclosure forms that the state requires to be signed in a real estate transaction, to inform whether a home is located in a PUD is now mandatory.

So what is a PUD, exactly?  According to Wikipedia,

PUDs tend to incorporate single-family residential uses within close proximity to two-family units and multiple-family dwellings to form a larger diversified neighborhood concept. Schools, churches, retirement homes, hospitals, and recreation facilities begin to find their way into residential districts. Residential districts also tend to use the best land in the community and the most favorable sites are protected from commercial and industrial uses.

These Planned Unit Developments are designed to enhance compatible land uses so that housing, recreation, and retail are located within one development.  Sometimes industrial parks are also in the same area.  When I lived in Lexington, Ky. the local government okayed a PUD named Beaumont Center.  Previously a field of waving grass, we heard that up to 20,000 people would live there - a community within a community.  We started to see apartments, then a liquor store and party barn, restaurants, and finally homes began appearing.  Today it is a thriving community with hotels, shopping, a city library, and affordable homes.  I would live there in a heart-beat!

So why would you have to disclose if a home is located in a PUD?  Because the buyer should be informed in advance if there are any restrictive covenants, homeowner bylaws, and master deeds that can impact how they live.  For example, can they have a storage building?  What if they want to have a yard sale?  By disclosing the rules and regulations within the PUD, a buyer comes in with their eyes wide open and this is how it should be on behalf of the buyer and to avoid liability as a Realtor.

So what the PUD. Find out if you’re buying in a PUD!