Greenbook: A Local Guide to Chesapeake Living - Issue 5 | Page 14

greenbook | spring 2015 from. Expect to see much lower density of development with larger lots for single family homes, new construction, modern layout and amenities, and a much lower price point typically in the $270,000 - $500,000 range for planned communities of single family homes. Examples would be beautiful communities that the local Schell Brothers developers produce – Senators in Lewes, and Sawgrass in Rehoboth Beach. Expect to see town homes and condominiums mixed in with some of these communities. Other more established town home and condominium communities that have high resale demand are The Tides (top end of Rehoboth Avenue) at the Route 1 Service Road, The Grande At Canal Point (single family and mixed development), and the higher budget canal lots of Canal Corkran. These latter three communities are within easy walking and biking distance of the Rehoboth Beach boardwalk. While the ‘Beachfront Bargain” is quite elusive at the Delaware shore, there are still newer communities laid out in the past 5 to 15 years that contain a mix of lot pull downs from in house developers (LC Homes, Capano Homes, NV Homes, for example) and buy to build (no builder tie in). There are many fine local home design and construction firms producing high quality work on lot purchases in communities such as The Glade (Rehoboth Beach), single family home lots in Kinsale Glen (Rehoboth Beach), and similar small scale sub divisions in Lewes, Dewey, or Bethany/Fenwick. Ask your REALTOR® for multiple recommendations and to facilitate a meeting for you. Investment Property Buyers While your REALTOR® can certainly facilitate the property search for investment property clients, I would recommend that you also work with a Financial Planner if your needs fall into the 14 arena of beach property purely for investment purposes. Your options could include 1033 rental property exchanges for rental properties sold outside of the area (or state), purchasing property as part of your investment portfolio (in an IRA or 401K), or buying beach property or multiple dwelling units as additional sources of income. Depending on your needs, the old adage, “Location, Location, Location” holds true. If looking for maximum income potential for your rental property, you should buy in downtown Rehoboth, Dewey, or Bethany Beaches and target the weekly summer rental market. An example of rental income for a modest 1940s beach cottage that a client has bought on the third block in Rehoboth Beach (pictured below) is around $48,000 for short-term summer rentals (mainly by the week), and $12,000 for long-term winter rental. $60,000 rental income per annum on a 3 bedroom 1.5 bathroom, central air property. If buying beach properties for rental outside of the downtown area, or in the quieter town of Lewes, while these properties still make attractive rental potential, expect these locations to be more appealing to long-term annual tenants. A point of note for investment buyers, and also for property owners looking to sell to appeal for investment clients While the property needs to be priced right for location, age, amenities, and the local market, investment clients should note that the buyer is looking at the property from the perspective of a rental, and not to live in himself or herself. As when listing or purchasing such properties, always ask yourself, “What would be the return on investment of this, or that (upgrade)?” “Is it needed in the context of rental income?” Use a REALTOR® who has professional training in home staging to appeal to the rental market. Alternatively, ask your REALTOR® to recommend local home staging companies. For example, a property I recently previewed for a client I recommended would make a great investment property due to its location, and the condition of the property. However, as a primary residence, the 1950s kitchen and bathrooms, while in great shape, would benefit from an upgrade prior to listing. Since the sellers did not want to invest any additional money into a property that they had maintained beautifully, my recommendation for the marketing plan for the listing was to price and market to appeal to investment buyers. The property had been in the same family for generations, and as such, the furnishings were more appropriate as a full-time home for an older couple. I recommended re-staging the property with simpler, neutral furniture, removing the many area rugs throughout the home that were hiding the low maintenance beautiful hardwood floors (sand at the beach!), and removing many personal accessories. I did not recommend upgrading appliances. They were clean and in great working order, suitable for a rental property. Working in conjunction with their Financial Planner, the client would prefer a quicker sale so that they could move on to a newer phase of their life. The property is located right next to two brand new single-family homes – same great location that would appeal to weekly beach tenants, but not in the same price point for primary and second home owners. You and your REALTOR® should be prepared for an open, honest business dialogue when listing or viewing property – on pricing, and on your selling goals. In summary, when looking for