Homeowner's Family Retreat
Turns into Profitable Investment
Editor's Note: This is the third installment of "Resale," a feature that profiles vacation-home owners and their residential investments. We'll take a look at homeowners' purchases, expenditures for improvements and/or mortgage costs, and their final gains upon resale -- and compare their profit to home-price appreciation rates in the area.
Purchased: March 2003 for $205,000
Sold: April 2006 for $250,000
Gain: $45,000, about 22%
Door County, one of the top cherry-producing regions in the U.S. with more than 1,500 acres of cherry orchards, is located on a peninsula on Lake Michigan in northeast Wisconsin approximately 150 miles from Milwaukee. Often referred to as the Cape Cod of the Midwest, the peninsula is 70 miles long and has more miles of coastline, state parks and lighthouses (about 10) than any other county in the U.S., according to the Door County Chamber of Commerce. About 2.1 million tourists visit each year.
The property: The two-bedroom, two-bath condo is a part of the Anchorage Cove condominium development in Egg Harbor, situated on the Green Bay portion of Lake Michigan. The 1,600-square-foot unit is on the lower-level of a two-story building of four units. It has a stone fireplace and patio. A sunroom and the master bedroom have wooded views.
The seller: Paul F. Lord, 60, an industrial sales manager who has a primary home 3½ hours away in Pewaukee, Wis., purchased the property as a year-round weekend family retreat. He found the development appealing because it is a waterfront community with a private marina that can accommodate boats up to 40-feet in length. Its amenities -- beach, swimming pool, tennis courts, walking trail and secluded location -- were also attractions, Mr. Lord says. But after some family members' lifestyles and careers changed, the property was no longer being used as intended, he says. So, he decided to sell.
Improvements: None
Transaction: Mr. Lord purchased the unit in March 2003 for $205,000 and sold it in April 2006 for $250,000. That's a profit of $45,000, not including the annual association fees of $3,396, the $2,200 in property taxes or the 6% real-estate commission he paid.
The bottom line: Mr. Lord walked away with a gain of about 22% of his purchase price. That's less than the 65% increase the average condo in northern Door County saw over the same three-year period. "The sale price based on only three years of ownership was satisfactory," says Mr. Lord, who added that he hadn't bought it as an investment property. "I was pleasantly surprised at the appreciation values [for a] secondary vacation property." His real-estate agent, Kathy Sanden, a broker associate with Century 21 Door Properties, says that the unit saw a modest price appreciation because it is in a waterfront condominium complex -- not in the middle of the peninsula. "[However,] this unit isn't facing the water," she says. "Units with water views fare better."
Sources: www.century21doorproperties.com, www.doorcounty.com, www.dcbr.org
Have you recently sold a second home that you think would make a good Resale profile? Email a description and a photo of your property.
-- Ms. Curry is a free-lance writer in Maple Grove, Minn.
Email your comments to rjeditor@dowjones.com.