For some, a property in the Hamptons is a vacation retreat; for others it’s a lucrative source of income; and for others still, it’s a combination of the two. In this first installment of a series, we share the story of how one Brooklyn-based couple (who has asked to remain anonymous) created an idyllic beach getaway for themselves—and others. In their own words (as told to Brick):
We started looking casually in early 2014. At the time, it was sort of a pipe dream: Wouldn’t it be nice to have a house in the Hamptons? But the more we thought about it, the more we thought we could make it work. We were selling a house in another city and wanted to invest in property elsewhere. We researched areas upstate and in the Berkshires because we like to ski, but ended up focusing on the Hamptons because we wanted a property that could generate income and the Hamptons seemed more lucrative in that regard.
We cast a wide net: Anything west of Montauk and east of the Shinnecock Canal was a possibility (west of the canal was less lucrative, or so we were told, and Montauk was just too far a drive with two kids in tow). We had a few things on our wish list: Four bedrooms (one for us and each of our two kids, plus a guest room), a fireplace (because we planned to use the house year-round), a pool (for the summer), enough lawn area for the kids to run and roam around, and a finished basement (because we're cramped in the city and wanted space for the kids that was separate from us!). Our budget: around $1 million. By the end of 2014 we were fully committed and working with an agent.
Finding the one
That December, we saw about 20 houses. One house in Bridgehampton checked all the boxes. It was traditional in style with cedar-shake shingles that we liked. It had a grand entrance, and light poured into the house. Plus, it had a fireplace and a pool and was very secluded and private. It had everything, but it was small, and my husband couldn't get on board. We put an offer on another listing in the Northwest Woods area of East Hampton and were outbid. In hindsight, we dodged a bullet with that one. It was 20 minutes from any town and so secluded we would have had to pay for snow removal, not just of the property but of the street, too. There is plenty of maintenance involved with a house, we didn't need to worry about the street, too.
Throughout the search, the listing for what would become our house kept coming up, but neither my husband nor I was into it. While it was in my dream town, Sag Harbor, we didn't like the exterior. I was looking for grey cedar shingles and it was stained brown, kind of like a log cabin. It didn't have much in the way of landscaping and it all just felt a little dated to me.
But when we finally did go to see it, it had everything on our wish list: 3,200 square feet, about 3/4 of an acre of land, four bedrooms including one downstairs for guests, room for kids to play and a finished basement. For my husband, it was love at first sight, but I hemmed and hawed (I really didn’t like the exterior). Ultimately, we ended up making an offer the day we saw it. I didn't have a change of heart. We had seen a lot of houses and had done our due dilligence. I think we made a very informed decision based on a weighing of the house's pros and cons and the fact that it was located in my favorite area of the Hamptons. It was a very analytical decision, which was important because this was going to be an income property as well as a place for us to enjoy. After some negotiation, we accepted their counter-offer.
Navigating the local real estate landscape
We had always planned to rent it out. It costs a crazy amount of money to maintain a house and we planned to offset some of that cost by renting it. Our offer was accepted in the middle of March and the main Hamptons rental season is Memorial Day to Labor Day, which meant we had to close quickly so we could get the house furnished and on the market ASAP.
My husband’s a lawyer but our agent told us that Hamptons real estate was like "the wild west" and we needed a lawyer with local experience. Our agent referred us to someone. I didn't like or trust her, though. She was ostentatious—big diamonds and all—and she never got back to us on anything, but we were under the gun, time-wise, and had no experience buying in the Hamptons. In the end, she really did know her stuff and helped us navigate the market. Another attorney may have been different, or not.
There were a number of taxes and fees to pay (for the inspection, the mansion tax, a Peconic Bay tax, closing costs, transfer of title, etc.) and we felt pressured to do as we were told so that we wouldn't run into any problems. Everyone knows each other out here and we were city folks dropping in. We just wanted to get through the close quickly and painlessly, so we sucked it up and stuck with our agent's lawyer. We ran into a few minor bumps—the inspector couldn't get on the roof the day he came because there had been a snow fall—but we managed to close on May 1st.
The road to up and running
We gave ourselves two weeks to get the house painted, furnished, and listed, which was crazy! I couldn’t have done it without a decorator friend (who, not insignificantly, is based in Denver!). We sent her pics of the house and our budget for decorating as soon as we put the offer in and she sent us back concept boards of designs. Our budget was $75,000—for the whole house, including linens, dishes, pots and pans, etc., which might seem low but for the most part we weren't paying retail (as a designer, my friend got a professional discount at most of the places she shopped). We would go back and forth until we came to an agreement on the furnishings for each room. We went over, but not by that much. She really worked within our budget.
Since she was in Denver (and we didn't have possession of the house yet) we needed to find a receiving warehouse in Long Island to accept the furniture she was ordering for the house. The day we closed, the painters came in. Some of the main rooms were fine as they were, so we only did the spaces that really needed work (like an office that had been painted green and a couple of bedrooms). We pitched in, too. I did the fireplace and my mother-in-law did one of the bedrooms. All the painting was completed in two days. Then, we flew my friend in from Colorado to oversee the moving of the furniture from the warehouse and its placement in the house.
While the furniture was being moved in, we drove out to Riverhead and hit the outlets for small furnishings: dishes, small appliances, bedroom and bathroom linens, and other home accessory and tchotchkes (bookshelves can’t be empty!). We went everywhere—Home Goods, West Elm, Crate and Barrel, TJ Maxx. She said, “Trust me,” and just started yanking things off the shelves. I was so overwhelmed, like a deer in headlights. We spent a few thousand dollars in a couple of hours and my husband kept reminding me that we were on a budget. But our goal was to rent at a certain price point, so we needed to furnish with higher-end items.
We made a spreadsheet of everything we needed to buy for the house, then researched each category and bought the best we could afford based on the reviews we read. We ended up spending more money on those things that made the biggest impact: a Sonos sound system with interior and exterior speakers, Nest thermostats, focal artwork in the living room, Sony and Samsung flatscreens, and we recently added a hot tub and a fire pit. We spent less on things that see more wear a tear: The blender is a Ninja, not a Vitamix, the bathrooms towels are from Kohls and the beach towels are from Target.
I should have spent a bit more on the pots and pans (they were trashed after one season and need to be replaced) and the pillows (I went cheap and they aren't comfortable). Choosing where to install TVs was a discussion: We decided to put them in the master bedroom, the den and the basement, but not in the kids’ rooms, living room, or guest room. Of course, we have Apple TV, Netflix, and all the expected amenities. At the end of the day, we decorated for us, with investment in mind. Our house is our escape, but right now we need to make money on it.
Stay tuned for the next installment: Renting out the house and dealing with tenants
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