Investing in the Real Estate Market on Long Beach Island New Jersey
Building a Spec House in the LBI NJ Real Estate Market
The LBI Real Estate Market
There are trends in the LBI NJ real estate market that point to stronger activity and increasing home prices. While these increases are not across the board, the general trend points to an increasing real estate market. With the impacts of Hurricane Sandy fading and the majority of the damage caused by the storm having been repaired, buyers are once again looking to LBI as a smart investment. One very lucrative area of investment on Long Beach Island is Building a Spec House in the LBI NJ Real Estate Market. Through this process, a buyer will purchase a knockdown or vacant land and build a new home to fit the trends of the LBI real estate market to sell on the open market. While this is a roughly year long investment, the return can be tremendous!
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Building a Spec House in the LBI NJ Real Estate Market
When looking to invest in the LBI real estate market as an investment, there are a few important points to consider:
- Location matters above all else. Generally, a spec project should focus on the oceanside or oceanblock
- The width and size of the lot is important to be able to design a functional home that will be well received in the LBI real estate market
- Keep an eye on the neighborhood as many buyers of new construction will look for an area of well maintained or new homes
The old adage of location, location, location cannot be over emphasized when looking at Building a Spec House in the LBI NJ Real Estate Market. While there are several locations (bayfront, bayside, oceanside, oceanblock and oceanfront), generally speaking the oceanside and oceanblock locations will see the most activity as they fit the widest demographic of home buyers. Bayside locations tend to be less expensive and can offer wonderful bayviews combined with a lower price point, however building a new construction on the bayside will eliminate some buyers in the market. Likewise, an oceanfront or bayfront location will be highly desirable and fit a niche in the market, but it will be a small niche as the price of these homes will often exceed $2,000,000. An oceanside or oceanblock location will generally appeal to the most buyers in the Long Beach Island real estate market at an affordable price for new construction.
Lot size is the next essential ingredient to buying a smart investment in the LBI real estate market. Most of the value for a home in the LBI real estate market is in the land and a wider, deeper lot will be worth more and will allow for more flexibility in the design of the house you are trying to build. Generally speaking, an investor should look for a 50 foot wide lot or larger as this will accommodate a nice design and layout with adequate square footage. A spec house should offer at least 4 bedrooms (and so much the better if 5 can be accommodated) and about 2,200 or more square feet. For most of the towns on Long Beach Island, this style of house can be built on a 50×80 lot which is the general minimum that should be sought when looking to buy a tear down on LBI.
While the location of the house is important, so too are the houses around it. Most new construction on the oceanside will be priced $1,100,000 and higher. Most buyers who are looking to spend this kind of money will be looking for a nice area with nice homes. The old saying of, “buying the worst house on the best street” should be followed when looking at Building a Spec House in the LBI NJ Real Estate Market.
Buying an Investment in the Long Beach Island Real Estate Market
Buying a house in any market, and especially on Long Beach Island, is a major investment but the rewards can be tremendous. A good equation to look for is having the finished house be about 20-%-25% under the current market value. This equates to at least a roughly $200,000 pre-tax profit in most cases. The entire process will normally take about a year to complete depending on how long the house takes to build and how quickly the house will sell! For more information about Building a Spec House in the LBI NJ Real Estate Market or the general condition of the real estate market on Long Beach Island, please do not hesitate to contact me, Nathan Colmer, and I will be happy to answer any questions you have!
Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
Click here to search all homes for sale in the Long Beach Island NJ real estate market
Related Articles:
- Survey and Flood Elevation in the LBI Real Estate Market
- Vacant Land on Long Beach Island
- Lot Sizes on Long Beach Island New Jersey