I’m stuck on the FAFSA form with our 2nd home and would appreciate any help.
My husband and I have no savings and small checking accounts. He owns and operates a construction business that has a separate checking account. About 10 years ago we purchased a property in Maine as an investment to help with some kind of eventual retirement. We paid $20,000 in cash (all we had saved to that point) and never took out any loans on the property. My husband has been very slowly building a house starting about 5 years ago. It is unfinished and not habitable. He does all the work himself and slowly buys materials with cash when we have a little extra here and there.
My problem is that I have no idea how to value this property. I have to report the property and “house” as an asset but how do I figure out what it is worth? The tax assessment is $41,000 but that is not the same as market value. I don’t want to value it too high but I also want to be as honest as I can. It does not generate any income and is actually at this point a financial drain. Any ideas?
Value it as the value of the land (what you could sell it for today). That might be the $20k you paid for it or might be more/less depending on the market in the area.
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I’d use the tax assessment number or something like that. Tax assessment values are usually a %age of the property value. So your property in my town would be more than the assessed value.
@MaineLonghorn
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Have you looked at Zillow? That might give you a better idea of the market value.
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Yes, I have looked at different real estate sites but the hard part is how to value a building that is under construction. I figured I could use an average of the land assessment and a comp from a real estate site. I just wanted to make sure my method was feasible and I wasn’t drastically over or under-valuing the property.
Thanks so much for your responses, everyone! I am probably overcomplicating this but it is nerve-wracking to think how much a small mistake could affect your child’s future!
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Just do the best you can and try not to worry. We had to value our cabin which is on 50 acres in the Maine mountains. It sounds fabulous and it is, but there’s not much market for an off-the-grid structure that’s accessible from May through early November. I just took a wild guess after looking at ads for other cabins.
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Seems to me that the value of the “house” is the actual value of the land… I cannot imagine if you put the property on the market, someone would pay a premium for a partially built structure (which might not be at all what the buyer wanted to complete).
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