Nathan Colmer | Van Dyk Group
C: 609.290.4293 | O: 609.492.1511
Part of the budget when looking to buy a home in the LBI real estate market should include the long term costs of ownership. This can not only help you to budget for current and future expenses but it can go a long way in determining what kind of home to buy in the LBI real estate market.
As is the case with any home purchase, there are additional costs that must be planned for. Apart from the buyer's closing costs in an LBI real estate transaction, it is helpful to know what to expect from the annual LBI ownership costs.
Property taxes will vary between the different towns on Long Beach Island. Beach Haven can at times register a higher overall tax rate and Ship Bottom tends to be the lowest. A very rough number to estimate will be between $4,000 and $7,000 for a Cape Cod style home and $8,000 to $13,000 for a newer construction.
Long Beach Island is serviced by New Jersey Natural Gas and Atlantic City Electric. The annual costs of each utility will depend on the size and efficiency of the home. Most Cape Cod style homes will have a monthly heating cost of $125 and a monthly electric bill of $50 to $100. Surprisingly, a newer home will be about the same thanks to a more efficient design. For most towns, water and sewer are billed annually and are a fixed rate. It is very important to remember that utility costs will vary on a number of factors.
Long Beach Island is serviced by Comcast Cable and Verizon. I personally recommend Comcast as a service provided. For certain plans, there may even be seasonal programs to pay less in the offseason when the house is not in use. Most cable and Internet packages will range $100-$150/ month.
Flood insurance has become an area of great concern for many buyers in the LBI real estate. The reality is, the cost of flood insurance is very affordable in most cases. For specific details please visit my flood insurance section of this website but some rough numbers to use are $700-$1,200/ year for a home above Base Flood Elevation and $1,500-$3,500/ year for a home below base flood elevation. Remember, these are ROUGH numbers and an elevation certificate is needed to accurately price a policy.
Homeowners insurance has a wide range of prices depending on the amount of coverage and the financial strength of the company who is providing the insurance policy. While it is best to speak with an insurance agent about a specific house some rough numbers to use are $1,500-$2,000 for a Cape Cod and $2,500-$3,500 for a larger home with more amenities. As with flood insurance, it is best to speak with an insurance agent as the specificity of a home's risk levels and the amount of coverage sought can make for wide variations in the cost of insurance.
If you are going to be renting out a home on Long Beach Island there are some expenses that should be planned for. If you are renting through a local real estate agent the rental commissions will usually be in the 10%-12% range of the base rental amount (but keep in mind all commissions are negotiable in the state of New Jersey). Alternatively there are "For Rent By Owner" websites which will charge a flat fee in the $400-$600 range. You should also budget for repairs and weekly cleanings of the home if you do not plan to clean the property yourself. Prices for cleaning will depend on the size of the house and the quality of the cleaning service.
Be sure to budget for annual maintenance of your LBI home. These expenses will vary but typical items will include yard treatment for weeds, repair from winter storms (siding, shutters, etc) and winterizing the house if you will not use it in the off season to avoid frozen pipes. If you plan to rent the house there will generally be more annual expenses incurred. Some common items that will need to be addressed are small appliance replacement and AC servicing.