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Real estate record and builders' guide: v. 20, no. 505: November 17, 1877

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Real Estate Record AND BUILDERS' GUIDE. Yol. XX. NEW YOEK, SATUEDAY, NOYEMBEE 17, 1877. No. 505. PiMislied Weekly by TERMS. ONE YEAR, in advance....$10.00. Communications shotUd be addressed to C. W. SAVEET, Nos. 345 and 347 Broadway. LOT OWNERS. We make this distinction between lot owners and lot speciUators, that the former, as a class, own their lots free of incumbrance, or but light¬ ly incumbered, whUe the latter, as a rule, own no more than a smaU margin of ten or twenty per cent of value, the remainder of the investment being represented by mortgages. A fm-ther dis¬ tinction may be drawn in regard to the character and purpose of these two ownerships. The one representing inherited or capitalized wealth, forms a fraction oiUy of the owner's entire wealth, the portion thus invested being commonly held in the contemplation of permanent or prolonged ownership. Capital thus diverted is analagous to deposits in trust companies at low interest, or to investments in govermnents, with this difference, that whUe the latter are productive of a low rate of interest, the investment in vacant land may be whoUy unproductive of income, and involve a sinaU outgo in the way of taxes and assessments —an experience which the investor wUlingly in¬ curs for the sake of the guarantee of safety for the principal sum. Such investors rarely look for an early or profitable realization. In fact the majority of them are whoUy indifferent to the matter of sale, preferring to bequeath such vacant property to their heirs. In many cases the lands have already been described and devised in exist¬ ing wiUs, which the owners are reluctant to disturb or modify. Hence they are apt to turn a deaf ear to all appUcations for purchase. Such lands are sometimes leased for long terms, but rarely sold. The lot speculator, on the contrary, pm-chases with exclusive reference to an early and quick re*- turn, prolonged ownership being fatal to his scheme. Hence the speculators are apt to be the most eager seUers, on either a rising or a faUing market. We might select at random from the owners of vacant properfcy on Fifth avenue, a considerable number, aU typical of the idea which we have here presented. Such for example, as the Paran Stevens, the WUlet Stevens, and the Winthrop estates, George Kemp, Robert Bonner, Mrs. Schley, Col. Hammersley, aud R. and A. L. Stuart • and, as the owners of promiscuous properties, the Astor, Goeiet and Rhinelander estates. The properties belonging to these o\yners are rarely or never urged for sale, and a proposition for purchase must conform strictly'.^p the owner's standard of valuations, if at aUlikely to be entertained. These grandee owners are the veritable break¬ waters of valuation, and we might say of build¬ ing improvements. In their policies and action they distinguish the real eatate of New York above that o£ any other American city, aud pre¬ sent striking analogies to the ownership of land in the city of London, where property has been vested in famUy titles for centuries, and is likely to remain so for the ages to come. To such own¬ ers it would be superogatory for us to attempt to tender either counsel or instruction. But there is another type of lot owners exceed¬ ing in number those we have just described, al¬ though their individual possessions may be far less in value or extent. These are persons who have deliberately invested a portion of theii- wealth in vacant property with the avowed pur¬ pose of holding it for an indefinite time, or at aU events, untU a satisfactory price can be realized for it, ultunate sale being their objective point. Some of these were fortimate enough to make their inve.stments before the great rise in real estate, upon a plane of values which would be considered low to-day, after the marked depres¬ sion which has succeeded the panic of 1873. Others again, were carried away with the vagaries of the speculators, and the iUusions of inflation, and invested at high prices, such as seem now impos¬ sible of reaUzation for some time to come, if ever. Nevertheless, their investments are free from mortgage debt or aiTears of taxes and assessments and afford the quaUfied satisfaction that there is a certain modicum of value left, albeit only a fraction of the original sum expended. AU owners are doubtless at present deploring their faUure to reaUze the highest prices whUe they were to be had, and are puzzled in a greater or less degree at the present time, to detemune what final disposition shall be made of their lots. A singular paradox or eccentricity of tempera¬ ment is often found to exist in the case of such owners as we are describing. The very strength of their position—^the absence of aU incumbrance upon their property—in too many cases proves an element of weakness by creating a power of resistance which leads them to forego favorable opportimities for selUng, simply because the of¬ fers made do not conform to the individual stand¬ ard of values which they set up. It is frequently the experience of brokers and intending buyers whoTattempt; to purchase property of such owners, upon proposing a price nearly, if not quite up to that which is asked, to meet either with a point blank refusal, or to be greeted with the inteUigence that the price has been advanced ten or twenty per cent. This eccentricity of strong lot owners proverbiaUy leads them to un¬ derestimate an offer. The fact of a proposition being made to them, or perhaps the mere appear¬ ance of a proposed purchaser, seems to act upon them as a stimulating tonic, enhancing their views of their property and fiUing them with the apprehension that by accepting the proposal made, they may fail to realize fuU value. It is idle to argue against this predisposition of prop¬ erty holders ; their own experience must be their monitor in aU such matters, A mild infusion of a true jnercantUe spirit in the minds of such owners would often save them from unpleasant predicaments, and from idle repinings over lost opportunities. It is, however, the conceded privUego of aU citizens ol a R&publio to place theif own estimate of value upon thwir possessions. To off-set resis¬ tance to demand when it is developed, they are obUged to exercise their perogative of holding their property indefinitely. Multitudes are in the dUemma to-day of an enforced, participation in the enjoyment of one or both of these privi¬ leges. We addi-ess our present remarks to those only who are sincerely seeldng outlets for vacant prop¬ erty, or some disposition of it other than aUow¬ ing it to remain idle and unproductive.. Two al¬ ternatives present themselves, either to seU or to improve. The proposition to improve prop¬ erty is becoming every day a naore feasi¬ ble and attractive one. The prices of ma¬ terials and labor were never so low in com¬ parison with the prices that improved prop¬ erty realizes, or its capacities of producing re¬ turns in the way of rent. Good and responsible builders stand ready to enter iuto contracts for the improvement of property at figures which ought to be sufficiently tempting to capitalists. The demand for improved property of all kinds, especiaUy moderate priced dweUings and flats, is highly encouraging. Provided the lots are marked at the true value of to-day, the loses on them, if any, being charged off, the results of their improvement in the Ught of present events and future prospects—it seems to us-^woiUd be highly satisfactory and beneficial to the present owners. But, as a rule, the investor in lofcs is apt to cherish a repugnance to the care of improved property, and hence, however, attractive this alternative may be on paper, in practice it fails to meet with favor on the part of such owners. The other alternative is that of selling, and here the opportunity is afforded of offering sound counsel to those who enter the market for this pm-pose. A cash sale—that is, one in which the owner would reaUze the entire price in money without trusting to any mortgage reclamation— would in the majority of cases be the most ac¬ ceptable disposition. But the drawback to this method is that few buyers, especiaUy among buUders or speculators, are able to part with the necessary amount of ready money, and when cases occm" of such readiness, the price is apt to be gauged to so low a point as to render ifunac- ceptable to the owner. Even the condition of leaving a goodly percentage of the purchase price in the way of mortgage, fails to offer the reqmsite inducement to buUders, unless the price is made to conform to the cash standard. The principal demand for lots for improvement comes from buUders, who also expect an inducement in the way of a buUding loan to facUitate their operations in erecting buildings, and ifc may be safely predicted that* in order to realize a price greater than the cash valuation, it is indispens¬ able for the lot owner to accompany his offer' with a proposition to lend njoney. It is precisely at this stage of a negotiation that the utmost dis¬ crimination and inteUigence are needed for the safe consunamation of a transaction. A large ioan wUl usuaUy induce the offer of a large price for the property, but wUl algo be attended with a corresponding risk—a I'isk that too o|teu out¬ weighs the^seeming benefit, Probably the most satisfactory disposal, all things being considered, that lot owners could i I