Can I Buy A House With Owned Land on DE coast?

[rdlr]

An example of leased land is Cape Shores, east of the canal in Lewes. Those are, predominantly, million dollar+ properties. That area is considered an island and is incorporated in the City of Lewes. Those single family detached homes are on leased land, a renewable 99-Year Land Lease with records showing that dates back to the William Penn Land Grant. Others in that area (near the Lewes-Cape May Ferry) have similar leases.

[Pocopsonite]

In Dewey Beach there are a lot of land leases that expire in less than 20 years, which makes it difficult if not impossible to get financing. But the prices are much lower than they would otherwise be, so some people pay cash.

In Dewey, some leases are re-negotiable. Others are not -- the owner of the land has other plans for the property when the lease is up. These leases usually specify that the lot must be left in the condition it was in when the lease started with the original lessee. Meaning it must be an empty lot. So some of these cute little cottages (and a few oceanfront condos that I know of) will have to be moved or demolished in the next 10-20 years.

The leased land situation is more prevalent in the northern part of Dewey, sometimes known as Rehoboth by the Sea. South of Houston Street, where the commercial district begins, it's less common.

This is info from a newsletter we received today, distributed by a realtor who specializes in Dewey Beach properties. It will give you a sense of how it works, at least in Dewey:

Hot property of the week is my new listing at MOD CUT - removed property address. The property is an ocean block property from Rehoboth By The Sea. There's about 10.5 years remaining on the lease @ $700. per year. You have the ability to buy the lot from RBTS at an asking price that was quoted in 2012 @ $900K.You also have the ability to re negotiate the lease for $21,200 per year. Sounds high? Not really

I also have a new listing on another leased land property. 1st one to it wins!!! The home is located on Bayard Ave (one of the few that face the road). The property is another RBTS leased land property. The lease has 34 years remaining @ just under $4K per year. This is truly one of the nicest leased land properties that I've been in.

I also recently learned that Sea Colony, down in Bethany Beach, is on leased land. I was quite surprised at that.

[eathealthy]

Thank You for the information. I have emailed and called a dozen different real estate agents in the coastal Sussex area to almost no avail. Yesterday afternoon, I was happy to receive a return call from a very friendly and knowledgeable agent. She is helping me search in the Millsboro area as she feels there are simple fee homes there that will fit my criteria. I'm thinking I may look into becoming a real estate agent in Delaware once I get there. Welcoming thoughts and insight on Millsboro.

[jmking]

My Wife and I were eyeballing a recently sold cottage in north Dewey just a block from the ocean. No mention of ground rent but the old, very small cottage was around $230k. I thought that was a bargain but now I know why.

[Pocopsonite]

Originally Posted by jmking

My Wife and I were eyeballing a recently sold cottage in north Dewey just a block from the ocean. No mention of ground rent but the old, very small cottage was around $230k. I thought that was a bargain but now I know why.

Yes, that ground rent and/or expiring lease situation changes everything, doesn't it?

I neglected to add above that the property at Chicago St. is a 2 bedroom, 1 bath cottage, and the list price is $339,000. Great bargain until you factor in exercising the option to buy the lot. If the asking price for the land was $900k in 2012, you can bet it's over $1 million now.

And $1.4 million for a "knockdown" building on an ocean-block lot, particularly if there's potential for a view from upper stories, is completely in line with today's market.

The Sussex County realtors' association maintains a "for sale" website that has limited public access. It used to be that you could reliably count on information about ground rent in their listing info. But it was recently re-designed and the ground rent info isn't always included anymore.

Here's the link: Sussex County AOR

I use it to supplement info from realtor.com. It doesn't always have more information, but sometimes it does.

[rdlr]

Originally Posted by eathealthy

I'm thinking I may look into becoming a real estate agent in Delaware once I get there. Welcoming thoughts and insight on Millsboro.

Not to squelch your idea, but the best real estate agents are those who know their geographical area. Having done that, I found my lifelong experience in Delaware was definitely a help. I could talk about a property, when it was developed, what the prior use was before development, the possibility of there being underground storage tanks on the site, zoning hurdles, and a host of other tid-bits which are common knowledge to those dyed-in-the-wool Delawareans.

I'm not saying newcomers can't do it, but I'd say....give it some time, and learn. Otherwise, there's a lawsuit around every corner. To be a Real Estate Professional is a full time job+ and not easy.

[eathealthy]

Originally Posted by rdlr

Not to squelch your idea, but the best real estate agents are those who know their geographical area.

It was purely sarcasm. When 2 out of 15 Real Estate Agents in one county return a Buyers inquiry, either a) they don't exist, b) they cannot keep up with the work load, or 3) they need some competition.

[jmking]

Originally Posted by eathealthy

It was purely sarcasm. When 2 out of 15 Real Estate Agents in one county return a Buyers inquiry, either a) they don't exist, b) they cannot keep up with the work load, or 3) they need some competition.

It could be many manning the phones are part timers.

Pocopsonite, thanks for that link. I'm seeing properties I've not seen on other sites.