Rehoboth by the Sea (Wilmington, Rehoboth Beach: leases, condos, mortgage)

[doctorjef]

Is anyone familiar with the community called Rehoboth by the Sea, which actually seems to be a part of Dewey Beach. All the properties seem to involve land leases of around 14 years and the land rent isn't high. There are some nice little beach houses that sell for under 300K. However, with such short land leases, it's unclear to me whether one's investment would be at all secure. I wonder if you could even get a mortgage on a property with such a short land lease. Even a 15 yr mortgage would extend beyond the land lease period. Can anyone enlighten me on this situation?

[kat196]

When we were looking to buy our realtor said that a lot of the property in Dewey Beach, including Rehoboth by the Sea is owned by one family. It was initially a 99 yr lease and from what I understand, nobody has any idea what's going to happen at the end -- which, as you say, isn't far off at this point. I felt like we would have been over a barrel -- it's no wonder the prices are low but I think they should be even lower with the uncertainty.

[doctorjef]

Thanks! Of course, with a 99 yr lease there would be no prob, but it just seems like they will have to develop some new lease terms before any of these properties would be marketable. Surprisingly, I have seen a couple sell in the last year or so, as I keep an eye on the listings. I suppose they'll go up a lot if the land leases get significantly extended, but I couldn't see buying one otherwise.

[pcity]

I can't imagine any way those leases get extended. The land Rehoboth-By-The-Sea sits on has to be worth so much money at this point. The family will probably sell out and the area will be redeveloped with luxury homes or condos. The only way the leases get extended is if they can't get anything else approved for the site.

[kat196]

Which means that anyone who is "buying" right now is actually paying hundreds of thousands of dollars to use the house and land for 14 years? I'm fairly certain most of the houses would be difficult and prohibitively expensive to move so it's really no different than buying in the mobile home parks? I don't even think they are guaranteed the option to buy......the owners could just sell out to a developer.

[Songbird111]

How long of a drive is it from N. Wilmington area to Rehobeth or Ocean City, MD area?

[doctorjef]

It's about an hour and a half or three quarters, assuming you aren't trying to drive it on a Saturday morning in the summer (speaking of Rehoboth, not Ocean City, MD). The community called Rehoboth By the Sea BTW isn't actually part of the city of Rehoboth Beach, but rather lies within Dewey Beach, which is immediately south of and contiguous with Rehoboth Beach. I like the drive actually -- there's still some farmland under cultivation along Rt 1 and it's a nice change from northern DE.