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| Best Practices: Property |
Compound Interest
Elizabeth Wine
06/01/2005
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Kitchens must be larger to accommodate entire groups of Food Network
addicts, private chefs and catering staffs. Larger gathering areas near the
kitchens are also de rigueur for handling foodie friends who want to participate
in meal preparation. “Now people hang out and enjoy the process,” Frisbie
says.
In other parts of the country, guest homes offer sportier amusements.
Clayton Andrews, a managing broker in Sotheby’s office in Jackson Hole, Wyo.,
says guesthouses in Teton County are generally limited to only 1,000 square
feet, imposing a more minimal magnificence. Andrews notes that most visitors
arrive to take in the scenery and experience nature, so the must-haves are more
basic. “You want a living room with a woodburning fireplace and large picture
windows that bring the outdoors indoors so you can appreciate it—the Tetons,
wildlife, flora and fauna.” If the guesthouse is near a river or fishing stream,
so much the better. However, as in the Hamptons and Lake Geneva, waterways
dictate precisely where and how owners are allowed to build and require owners
to leap through numerous environmental hoops.
Andrews estimates that
proximity to mountain views means a guesthouse will earn an owner at least 150
percent on his overall investment—200 to 300 percent if near a riparian habitat.
“You’re not going to lose money on it,” he claims.
Elsewhere in the rugged
West, there seems to be a bit more space for guest homes, but at a steep cost.
Dave Wilson owns his own construction company that builds high-end homes in Sun
Valley, Idaho, the oldest ski resort in North America. Like other regions
rapidly filling with second homes, Blaine County has zoning limits: one
accessory dwelling unit per parcel of land. Wilson’s most recent Blaine County
project was a 2,000-square-foot guesthouse, sharing space with an
18,000-square-foot home. The cost of building in the area ranges from $300 to
$500 per square foot—or $600,000 to $1 million for a 2,000-square-foot
guesthouse alone.
While brokers vow that opulent guesthouses invariably
increase resale values, some financial advisors say homeowners should not
justify spending for master-chef kitchens or pools with visions of hefty resale
profits. Bob Confessore, a certified financial planner and real estate expert
with Wealth Builders, a Little Silver, N.J.-based manager of family offices,
concedes, “This is a lifestyle decision rather than an investment
decision.”
 House Rules
Property owners offer these tips for streamlining a
guesthouse project:
• Learn the city rules. Meet with the local building department to
discuss zoning requirements and limitations. For example, your guesthouse’s
total square footage might be determined by the size of your lot. In the 2-acre
zoning category in East Hampton, houses must be a minimum of 800 square
feet.
• Learn the countryside rules. Check to see if your property carries
environmental restrictions. If the property includes wetlands, woodlands, dunes,
farmland or waterfront, it will likely have restrictions on how close you can
build to these features, and there will likely be areas where oil and septic
tanks cannot be buried. Local land engineers can help navigate the maze of
agencies and paperwork.
Elizabeth Wine is a freelance journalist based in Brooklyn.
elizabethwine1@yahoo.com.
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