Published on Monday, October 12, 2015 by Land Century
The actual designations will vary from state to state, but there are common designations available.
Waterfront Land Designations
Several designations exist for waterfront property, but the names and exact wording will vary from state to state. There are also several states lacking these designations.
Meant for specific zones in urban areas. Low and high density designations will be available in most cases.
Areas where waterfront designation is within locales where protection is needed for ecological purposes.
Regions where aquatic life lives in the waters. These are typically designated in unique situations and environments.
Lakefront properties that reside in specific areas. Commercial waterfront and residential waterfront properties do exist. In the event that a property is commercial, this will allow you some rights to build up the land in an attempt to make it profitable.
Youll find certain areas where erosion may have occurred and will have different designations. The main concern is ensuring that the restrictions on the land, where applicable, allow the land to be a good investment for buyers, and for your own purposes.
Uses for Waterfront Land
Waterfront land holds such an immense value because its limited. People want to get out of the hustle and bustle, and enjoy a day at the shore or the lake. And, the property prices in these areas always demand a premium.
Its a great opportunity especially in areas such as New Jersey, Florida and California which are tourist hotspots in the summer.
Personal Land Uses
There are several commercial uses for waterfront properties, but there is also the possibility to build your dream home on the land. Youll need to learn your citys local codes and ordinances pertaining to waterfront land and what building restrictions exist.
For example, you may have to build your home in a certain manner, to meet local codes due to flooding concerns.
You will also find restrictions on how close structures can be to the waterline itself. So, there are a few concerns that would stop you from building a structure on the property. But, youll almost always find that the land can be built upon. Youll just have to do so within certain local requirements and guidelines. Many investors will buy the land, build a home on it and sell it.
Or, you can live in the home yourself and sell it in the future. When looking at waterfront homes, the price of the land is almost double when compared to inland homes. This takes into account the actual value of the home if it were moved inland instead of being on the water.
Commercial or Investment Options
All waterfront property has the potential to be built into a commercial center. Even with the smallest amount of work, you can turn these properties into profit.
Lets take a look at the possibilities this land provides:
Waterfront land is rented for dirt cheap during winter months, and this can be a concern in some locales. But, come the summer months, you can more than make up for the lost income with very high rental rates. Premium million dollar homes can rent for tens of thousands of dollars a week on the East coast.
Even smaller homes can have their rental price increased 300% or more during the summer months. Its a great investment for anyone who wants to rent their home out all year long. Prime lake and oceanfront rentals are in the highest demand.
Boating Rentals and Tours
Many homeowners will live on their waterfront property and take advantage of rental services and tours. What are the most popular options?
- Watercraft rentals: Jet ski rentals are a great way to earn profit off of the land. These rentals can go up to $100 a day, and with several jet skis, youll turn a profit in no time.
- Boat rentals: Renting out a boat for people that want to go fishing or enjoy the water is possible.
- Tours: Act as a captain and offer boat tours and packages. This will turn into a full-time business where you get to enjoy the water all day.
You must make sure that you have all of your liability insurance and legalities taken care of accordingly. This means ensuring that renters are legally allowed to drive a watercraft and have the appropriate licenses where applicable.
Leasing the waterfront property is a cheaper monetization option. Businesses looking to expand their operations will work with land owners to lease the land. This allows for very little investment on your part and instantly makes the land profitable. If the land is in prime fishing waters, you may also find fisherman willing to pay you to dock their boats on your property.
In terms of pure investment, the price of waterfront property peaked in 2007 when the market itself peaked. This was a time when you would find the highest priced waterfront property in history listed.
And, the prices have picked up since the bottoming out.
One key point to note is that the prices of home values in general have increased by 13% since 2012. Over the same duration, waterfront home property values have increased by 8%. These numbers show that the market is recovering, but waterfront properties are not performing at the immense rate that overall home values have.
Dont misunderstand: waterfront property values, according to the media, are $370,900 on average, while the single-family home is valued at $171,600. So, the value is over 100% higher when living in a waterfront property.
The key is to have a home on the property as this is where the value truly increases.
If the land doesnt have a home and you dont plan on investing in building a home on the property, ensure that youre using the land as a long-term investment.