Tear it down and build it up
So here’s the riddle of the day, “Where do you find three separate cities surrounded by water where it’s almost impossible to find a building lot?” Well that wasn’t really a tough one to figure out, but what really is tough on Anna Maria Island is deciding on how much of a renovation to tackle or to just go for it and tear down.
Tearing down a property, also known as infill in the never ending real estate vernacular, could be the solution you may be looking for when you can’t find the perfect house or a suitable building lot. The National Association of Home Builders says about 25 percent of the single-family homes built nationwide will ultimately be torn down, and one out of 10 sales will be teardowns. They go on to say that today’s buyers don’t want a house that looked like their grandmother lived in it, even if it’s at the beach. In addition, many older homes are hard to renovate with low ceilings, old wiring and who knows what may be lurking behind the walls.
So the answer to the age old question of renovate vs. teardown really lies with the location of the property. A functionally obsolete house with the main value in the land it’s built on may be the key for buyers who want new homes in specific desirable locations. A good rule of thumb according to teardown.com is if you can buy an older functionally obsolete but well located house for $300,000 and a newly constructed house on the same lot will support a price of $600,000 to $900,000, it may be a suitable candidate.
Now that you know where you want to be, before you start tearing down, you have to find the right property to aim the bulldozer towards. It has to be a property that may be smaller than the average in the neighborhood, have outdated kitchens, baths, mechanical systems, electric and everything else. Or worse, it may only have one bathroom or even two that in today’s world could render it obsolete. In addition, frequently the perfect property has serious structural issues and may cost more to repair than tear down. The cost to demolish a house can range anywhere from $8,000 to $15,000, but I wouldn’t put too much stock in these numbers, which vary greatly depending on location and size.
However, demolishing the house will probably be one of the easier issues if you decide to undertake a project like this. Wait till you start dealing with local bureaucrats and FEMA when you start filing for permits and just pray that you’re not in an historic district or some other defined area where you have to adhere to yet another layer of regulations. And what about financing your little nightmare? Well you better have a lot of cash and/or qualify for a construction or bridge loan or have a benefactor because most conventional mortgage lenders will not give you the time of day.
If your turn-on is a new house and you can meet and survive the financial and bureaucratic demands, then get out the sledge hammer and start whacking. Besides what’s more desirable than Anna Maria Island? Whether the property is waterfront on one of the canals streets or a side street, there isn’t a bad location on the entire barrier island.