The idea wasn’t exactly an accident, but it was not at the top of the to-do list either. In the end, it resulted in a second home gathering place in close proximity to home itself — especially for casual collectors and automobile enthusiasts.
Several years ago, when Cyndie Johnson and her late husband were planning a residential community near Coeur d’Alene, Idaho, the couple needed to purchase an additional piece of property to provide an another access easement for the development.
“All we really were looking for was a small strip of land, but we ended up with about 5 acres,” Cyndie Johnson said. “While we didn’t think we would end up with such a large piece, we knew what we would do with it.”
The Johnsons knew that the community’s covenants, conditions and restrictions (CC&Rs) would prohibit not only huge garages but also the parking of recreational vehicles or boats in driveways and on streets. Since most of the new homeowners would be families with children or aging retirees who planned on spending their winters in Arizona, the Johnsons believed an expanded storage facility would be well received.
The first project was a sort of hobby. The couple tried to gauge how people would receive the concept of condominiums for storage instead of the traditional rental storage unit. The leisure pursuit turned into GarageTown USA, a full-time business with 19 partnerships and franchises in six states with more on the way.
“We just didn’t know how quickly they would sell or how fast a community of like-kind people would emerge,” Johnson said. “That’s the thing that really surprised us the most. When one classic car collector brought in one of his vehicles that he simply did not have room for at home, other classic car buffs just seemed to follow.”
The Johnsons quickly found out that space needs for baby boomer and retiree toys were not restricted to automobiles. Classic boat buffs, stamp and coin collectors, small office seekers needing wireless access, weavers and quilters all made inquiries and many of them purchased the garage condos priced from $57,000 to $85,950 in GarageTowns in Spokane and Coeur d’Alene. Some units in other areas come as large as 2,000 square feet, have been outfitted with custom floors and sleeper sofas and can cost up to $200,000.
Like all real estate, prices vary depending upon the area and how much the developer had to pay for the land and its improvements. Brad Thorson, a former commercial broker for CB Richard Ellis, plans to charge a base price of $100,000 for the 67-space development he is building in Federal Way.
“You would be surprised at the amount of money it takes to rent a nice storage place for a boat or recreational vehicle,” Thorsen said. “There are a lot of boats in the Puget Sound area, and many people are tired of trying to find storage close to home, plus worrying about the rising rental rates. With this concept, you could own for probably less than you are paying in rent and also see the possibility of appreciation.”
Owners get a deed for their unit and pay their own utility bills and property taxes, plus a condominium fee for maintenance of the clubhouse and bathrooms. Johnson said the clubhouse in Coeur d’Alene has been a huge success, hosting wine tastings, catered luncheon meetings, weekend football games and Sunday poker tournaments. The clubhouse has a kitchen with granite counter tops, plus a large den-living area with a large a leather sofa and chairs.
According to the Internal Revenue Service, mortgage interest is tax deductible on a primary residence and a second home. While taxpayers can own several residences, they can only deduct the mortgage interest on two of them. A “qualified home” must have sleeping, cooking and toilet facilities. The obvious candidates are second residences in the desert sunshine or vacation cabins closer to home. But a mobile home, a house trailer or a boat also can qualify as a second home.
Condo garage units with sleeper sofas make an intriguing candidate for the second home category. Rob Keasal, real estate tax specialist in the Northwest accounting firm of Anderson ZurMuehlen, said that spaces would probably qualify as a second home and for the mortgage interest deduction, but buyers should determine if local zoning allows for overnight accommodations.
That’s good advice — especially if need to sleep near your precious car every now and then.
Tom Kelly’s book “Cashing In on a Second Home in Central America: How to Buy, Rent and Profit in the World’s Bargain Zone” is available at www.crabmanpublishing.com.
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