Nathan Colmer | The Van Dyk Group
C: 609.290.4293 | O: 609.492.1511
Building a new home on Long Beach Island New Jersey can be one of the best investments possible in the LBI real estate market. Apart from the obvious benefit of being able to design a home to the specifications you desire, there is enormous upside financial potential relative to the real estate sale market on Long Beach Island. I have put together information covering all aspects of new construction on Long Beach Island to help you understand the process and benefits of such an endeavor.
Building a new construction in the LBI NJ real estate market has a number of advantages over buying a ready built home. The basic process involves:
Below you will find details on the steps needed in building a new home on Long Beach Island.
Most of the new construction on Long Beach Island takes place when an older home, such as a Cape Cod, is purchased and demolished to make way for the new house. Demolition costs will vary greatly depending on the size and style of the house but demolition will typically cost around $8,000-$10,000. Building a New Home in the LBI Real Estate Market will, in most cases, take between 6 and 8 months to complete after demolition has finished. The cost of building a new home will vary depending on a few factors such as:
A good “rough number” to use when estimating new construction is around $175 and $200/ sq foot. Therefore, building a new home with finishes of hardwood floors, granite counter tops, hurricane impact windows, etc will cost around $350,000-$400,000 for a 2,000 sq foot house.
When the cost to build is added to the price of a vacant piece of land or a tear down, there is amazing upside potential. I handle a great number of these transactions and we see an immediate equity position of between 20% and 30% relative to the cost of the land. To put that into perspective, if a buyer were to spend $1,000,000 on the purchase of a piece of land and the building of a house, the finished house would be worth between $1,200,000 and $1,300,000 in the current market on Long Beach Island.
The old adage, Location, Location, Location is of the utmost importance in the LBI real estate market. The location of the home will help to determine the size and style of the house that can be built as well as the future value of that home in the LBI real estate market.
Depending on the site location, most new construction will have some degree of waterview. Views help to add a great deal of value to a home int he LBI real estate market so it is important to take advantage of any view and design the house accordingly. You can review some sample house plans here and get an idea of layout and style.
Learn about some real life projects I have put together to help a buyer and builder develop a great home with tremendous upside value in the LBI real estate market. Such opportunities exist everyday in the real estate market on Long Beach Island and I can help you find them!
Each town on Long Beach Island will have unique building codes and setback requirements. While there rules are constantly evolving, it helps to have a basic understanding of what to expect from the municipalities and from FEMA guidelines. An understanding of these rules is critically important to ensure your dream house can actually fit on the lot!
One of the greatest concerns buyers have is how to best finance the property purchase and construction. This is certainly something to take into account as this kind of speculative financings is notoriously expensive and partnering with the wrong bank can skew the returns unfavorably. There are a few creative ways to finance the purchase and construction of a new home in the LBI real estate market as well as some local banks who have attractive options available.
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