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Maine Spring Recreation

Maine Spring Recreation

I know it doesn’t quite look like spring is here yet in many areas of Maine, but we know it is coming. For some, spring brings with-it pent-up demand to get outside and recreate. Here are some ideas for recreating in early spring.

Hiking Trails

Spring time hiking offers the reward of uncrowded trails, views not available when the leaves are on and wildlife sightings from unpressured animals. In many places you will need to bring a variety of foot wear possibly including snowshoes. North facing slopes of mountain trails can be a nice challenge, just be prepared for the ice and snow.Dam Pool Grand Lake Stream

Open Water Fishing Season – April 1st

Yes, it is still cold and most of our lakes remain covered in feet of ice, but some of our rivers and streams are open and produce good fishing. In eastern Maine you can try your luck at Grand Lake Stream for landlocked salmon and brook trout. Just south of Baxter State Park the West Branch of the Penobscot River is fishable, though I recommend you watch the weather forecast and pick a nice day. It can turn winter like this close to Mount Katahdin. Most anglers this early in the season concentrate their efforts in Nesourdnahunk Deadwater for salmon and trout. Be sure to check the rules before you head out on an outing at this link to open water fishing regulations.

 

Late Season Snowmobiling in Northern Maine

While most of the world is starting to bloom in mid to late March, far northern Maine is still heavily covered in snow and for those still in need of a snowmobiling fix, the Fort Kent area should be on your radar. The trails can vary in quality depending on the weather, but for those hardcore riders, long sunny days and no crowds can make it worth the effort.

Spring Turkey SeasonMaine turkey hunting

For those that like calling in a gobbler the spring turkey season opens April 29th in WMD’s 7 – 29. The season for WMD’s 1-6 have special season and dates see this link to Maine IF&W site for all the details. Follow this link to the MIFW information on spring turkey hunting.

Map of Maine WMD

Make Some Maple Syrup

Collecting sap from maple trees on your property can be an early spring activity with a sweet reward. Here are links to a two-part video by our own Rick Theriault, the Maine Real Estate Guide, showing the entire process.

Tap to Table 1  Tap to Table 2

Buying Recreational Property

 If you are looking for a recreational property for hunting, fishing, hiking, trail riding and other outdoor adventures see our property listings organized for recreational use with prices to fit any budget with small country lots and homes to thousands of acres of wild land in Maine. Start your recreational property search HERE.

Honey Bee Update | MAINE REAL ESTATE

Rick Theriault- Your Maine Real Estate Guide is back with another update on his honey bees. After a long winter its time for them to get out, stretch their wings and cleanse their tiny bodies. In the next few weeks they should start feeding on the same maple trees he has been making his maple syrup

Tap to Table | Episode 2

The sap has been gathered and its time to boil some syrup!

Pro Tips: 
* Don't boil syrup start to finish in your home you will turn it into a sauna!
* Filter your sap- no one wants bark on their pancakes!
* Temperature matters- an end temp of about 220 degrees is ideal. 
* Remember the 40-1 ratio: 40 quarts of sap = about 1 quart of syrup
* Always keep some ice cream on hand (This one might be the most important)

Tap to Table | Episode 1

 

Did you know 40 gallons of sap to yield 1 gallon of syrup? Rick Theriault- Your Maine Real Estate Guide starts a video series about tapping maple trees for syrup in northern Maine.

Here are the steps covered in this first in the series:

Step 1. Tree identification

Step 2. Drill a hole & 'tap' the tree

Step 3. Collect the sap in a bucket

 

Stay tuned for the next installment!

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    Market Trends and Predictions 2019

     

    I am writing this post from the Realtors Land Institute National Land Conference in Albuquerque NM. This annual conference is attended by about 500 of the top land agents across America.  During the three-day conference we network with other land professionals and attend lectures by national economists, political analysts, scientists and other experts speaking on a wide array of topics related to land use and sales.

    Economist Dr. Mark Dotzour shared his opinion that the US economy will continue to do well in the coming year. His analysis of current trends and historical data do not point towards a looming recession, as some of the national media have been touting. His advice to shut off your CNN and Fox News feed, which he feels is pure propaganda, was well received by attendees. Indicators such as a consumer confidence index at an 18-year high, a 3.5% wage increase nationwide in 2018, over 7 million open jobs in the US, low oil prices and low interest rates should keep the national land market up for 2019. Expect interest rates to creep up a little bit this year. The fed will look to make some room to drop rates when the next recession comes. At the current rates there is not much room to drop

    A land use gaining momentum in the western and southeastern US, which I believe will become a larger niche market in Maine, is “glamping”. Glamping is roughly defined as glamourous camping utilizing extravagant canvas tents, tree houses, and other unique structures. Cost per night stays range from $100 to more than $300. I spoke to several western ALC’s whose clients have purchased property to develop this niche business. Be careful investing in this in heavily regulated areas of the state, Colorado towns have started to zone the use out as undesirable.

    By 2020 the millennials will become the nation’s largest demographic. Many in this group are saddled with a lot of debt and are still living at home, however, about 19% of them live in their own home. Millennials are beginning to consider land as an investment that doubles for recreation. I have personally sold land in the past year to this group. They do not have the knowledge about land investing that was more common in Gen Xers passed on by their baby boomer parents, but they are intelligent buyers eager to learn more about the investment side of land. Expect to see more Maine land purchased by this group in 2019.

    The hot topic in land this year is industrial hemp because the new farm bill legalized the growing of cannabis plants containing less than .3% THC. This level is where the federal governments differentiates between marijuana and hemp. CBD oil derived from hemp is the most profitable product to date. CDB oil has not been approved by the FDA, however consumers believe it relieves a host of ailments, including insomnia, anxiety, chronic pain and post-traumatic stress disorder.

    Agricultural economist Dr. Terry Barr, spoke about a wide variety of topics. Top of his list is China’s slowing growth to about 6%. Overall worldwide growth rates are also slowing, with most increases in growth now coming from unadvanced countries. A strengthening US dollar taking buying power away from other countries will mean that US commodities will not do as well. He expects that US economy to grow more moderately than it has historically. New housing is being built strictly on demand as most spec builders are gone after the last big recession. He expects that residential housing markets will remain steady as they go.

    Despite predictions of slowing world growth, at our brokerage we have seen an increase in the number of requests for winter land showings and contracts written over the previous winter. Overall Maine land sales have slowed a little but most of that I believe is due to overall lower inventories of parcels. The hunting and recreational market is strong. We have many buyers looking for cabins and homes on 40+ acres. There has also been a high demand for agricultural properties. Timberland interest has also picked up. If you are considering a sale of your land give us a call to see what the current market values are in your area.

    Tired of paying Taxes? Try a Like-Kind Exchange

    Death and taxes. Neither can be avoided. However, with some clean living, careful choices, and a little luck the former can be delayed. So can the capital gains tax on the sale of your real estate, which happily only requires some planning.

    The tool to make this delay of tax is known as a Like-Kind Exchange, often referred to as a 1031 exchange, from the IRS code of that same number. As of January 2018, this only pertains to real property used productively in business or held for investment and not personal property such as equipment, vehicles, and other such things.

    What is a like-kind exchange? Simply put, it is exchanging one property, held for productive use in a trade or business or held for investment, for another property for those same purposes. What it is not? It cannot be used for delaying taxes on real estate which is held primarily for sale, often referred to as dealer property, where it is your business to buy and sell real estate for profit. This will likely be taxed as ordinary income.

    Pros and Cons – The benefits of using a like-kind exchange are pretty obvious if growing your real estate investment net worth is your primary goal. Reinvesting equity gain which would otherwise be paid to Uncle Sam in capital gains tax, may net a better return on investment. The downside to the exchange can be the lack of liquidity of real estate in general and less diversification of investments. As an example, if a great stock opportunity became available to you, the equity from the property sale could not be used tax deferred to purchase it.

    Is it complicated you ask? We are talking about the IRS, so of course it is. Nothing worthwhile ever comes easy. There are several types of exchanges and rules such as time to complete the exchange, naming of properties to exchange into, and not directly receiving the proceeds from the sale of the relinquished property, plus many other potential concerns. The process involved in an exchange can take up many chapters in how-to books, so I will not cover all the details here. The good news is, if you are interested in an exchange, there are professionals out there, such as Qualified Intermediary (QI), CPAs, real estate brokers, and attorneys that can guide you through the process.

    If you think that the like-kind exchange is a possible route that you may take, plan it from the day you put your property on the market. Engage the appropriate professionals that are required to help you. Be sure you inform the buyer of your property about your intentions to exchange in both the property disclosure and purchase and sale agreement. This is not necessarily required but certainly will make for a smoother closing.

    If you need more information, here are some links to the IRS website and a QI and attorney we have used.

    Rudman and Winchell Asset Preservation Inc. IRS Guidelines IRS Form 8824

     

    Maine Shoreland Zoning Rules 101

    Before you purchase that lake, ocean or river front land, home or cabin in Maine, you should know a little about shoreland zoning rules. This includes all area within 250 feet of the normal high water mark of the water feature. Knowing the basic rules will help you better select a property that meets your expectations.

    As Mainers, we often take good water quality for granted. It is well protected here, but that is not the case in every state. Recognizing the value of water quality to fish, wildlife and us humans, the state adopted shoreland rules with beginnings in the 1970’s that continue to be updated today. The reasons for mandatory shoreland zoning are many, including such goals as preventing water pollution, protecting wildlife habitat, and conserving the scenic beauty of our special places to name a few.

    The rules do depend on where the property is located, either organized or unorganized township. Also, what property type you are going purchase, such as an unimproved waterfront parcel or an existing residential structure. Also, please note that every organized town can have slightly different rules depending on the ordinance they have adopted, but all will comply with the minimum requirements. Check in the code enforcement officer (CEO) of the town to get the local ordinance.

    For unimproved lots, here are the basics.

    • Minimum Lot Size – For tidal areas 30,000 square feet ( just less than 7/10 of an acre) For non-tidal areas 40,000 square feet (just over 9/10 of an acre)
    • Minimum Water Frontage – For tidal areas 150 feet For non-tidal areas 200 feet
    • Minimum Lot Width – within 100 feet of the high water mark shall be equal to or greater that the required water frontage.
    • Minimum Set Back for buildings – For great ponds and rivers flowing to great ponds 100 feet from the high water mark. For other water bodies, 75 feet from the normal high water mark.
    • Vegetative Clearings – This is a probably the most misunderstood of all shoreland rules. Review the ordinance for formulas to use prior to any harvesting of trees and/or other vegetation and do consult with the CEO prior to beginning to avoid possible fines and other penalties.

    If you are purchasing a non-conforming ( AKA “grandfathered”) structure the rules for additions, expansions and other changes can vary a lot depending on the size, setback, height and other features of the structure. All of these changes will at a minimum require CEO approval, commonly planning board approval.

    There are many exceptions to the above. This can be a complex topic, so I have provided a link to the Maine Department of Environmental guidelines here should you need additional information.

    Maine Subdivision Rules - Should You Develop Your land?

    Maine Subdivision Rules - Should You Develop Your land?

    In Maine, there is a difference between a division of land and a subdivision of land. In most municipalities dividing your property into two separate lots requires little or no permitting. However, dividing a property into 3 separate lots within a 5-year period does require approval in most cases, and is the definition of “subdivision” in our state.

    Increased Property Value

    Why would you want to do a subdivision? Most property investors look at the subdivision process as a way to increase the per acre value of their property. At first the thought of a smaller lot being worth more does not make sense, but consider that by reducing the size of the acreage you bring the gross selling price lower and within the purchasing power of more people. More people competing for a property usually translates to more demand and a higher price.

    Higher prices may or may not translate into more profits. Before jumping headfirst into a subdivision some research and planning should be undertaken. Market conditions should be the first consideration. Data such as recent comparable lot sales, how many sales have occurred, lot sizes of successful sales, what is the current supply of lots, absorption rates, and financing availability to name a few. Next what will be the costs of surveying, wetland delineation, engineering, road construction, soil testing and other requirements of permitting? After thorough analysis and due diligence a property owner can decide if the risk is worth the reward to subdivide.

    Requirements

    Every organized town in Maine may have a slightly different subdivision ordinance. The unorganized territories in Maine have a uniform ordinance with little variation in requirements. Typically, a local planning board will review a proposed subdivision to see if it conforms with the ordinance. The process will consist of several meetings starting with a presentation of a preliminary sketch of the proposal. This is followed up with notifications to the public and nearby property owners of the proposed subdivision and the date of the public meeting to review it.

    This next hearing consists of a more formal presentation of a preliminary survey plan of the layout of the proposed lots, roads, easements, slopes, soils etc. Public comment is permitted and heard by the board. After this meeting any changes required by the board need to be addressed and another hearing with a final plan will be scheduled. Assuming no other issues are outstanding, the board will sign the final plan that will be recorded in the county registry of deeds.

    Exceptions

    There are a number of exceptions to the rule to sell property without the process of subdivision. Gifts to relatives (see definition in statute) may be exempt if the donor has owned the property for at least 5 years and the consideration is less than ½ the current assessed value. Sales to abutting property owners may be exempt from subdivision rules. In unorganized territories, 3 lots can be created in a 5-year period as long as the 3rd lot is retained for forest management purposes. This is often referred to as the ‘2 in 5 Rule.’ There are other exceptions listed in the statute linked above.

    Summary

    This post is intended to encourage a thoughtful process in land investing and should not be viewed as an endorsement to subdivide your property. In many cases I would advise clients not to.  The above descriptions are a simplification of the process, not a complete outline of all potential requirements of every planning board. You are well advised to consult with experienced professionals like real estate attorneys, surveyors, soil scientist, and land brokers before undertaking the subdivision process.