ArcaMax

Dear Monty: I live on a lake. All the houses that have sold in the last 15 years have been teardowns. I would have to do very little before putting it on the market. Is this a correct assumption??

Monty's Answer: Your assumption needs significant refinement. While lakefront teardown properties do represent a unique market segment where land value dominates, your preparation strategy should depend on your specific goals and local market dynamics rather than a blanket "do nothing" approach. You're correct that the buyer will only pay for the value of the land in teardown scenarios.

Let me provide you with strategic options tailored to your specific situation:

No. 1: Minimal Preparation with Clear Teardown Marketing: Invest only in basic safety measures -- secure broken windows, address obvious hazards and ensure safe property access for showings. Market explicitly as a teardown to developers and custom home builders. This approach works when you want maximum speed and minimal investment, but you may leave money on the table if buyers can't envision the property's potential due to current condition distractions.?

No. 2: Strategic Enhancement for Broader Buyer Appeal: Consider modest improvements that help buyers visualize the land's potential, such as clearing overgrown vegetation, basic exterior cleaning and ensuring utilities are functional for inspections. This approach can attract both developers and end-users considering renovation, potentially expanding your buyer pool and increasing the sale price.

No. 3: Professional Land Valuation and Targeted Marketing: Hire an appraiser experienced with lakefront teardowns who can determine current market value, taking into account location, zoning and nearby property sales while considering metrics like cost-per-square-foot of the land rather than the home's current condition. This data-driven approach helps you price competitively while identifying the most profitable buyer segments.?

Critical considerations for your decision:

-- First, verify your teardown assumption. Just because recent sales were teardowns doesn't guarantee yours must be. Lakefront properties command premium prices. Prime lakefront access can increase property values by significant percentages, so ensure you're not underselling renovation potential.

-- Second, familiarize yourself with your local zoning regulations. Many lakefront communities have strict building codes, setback requirements, and environmental regulations that affect development potential and buyer interest. For example, a code that allows a boat dock will likely increase value.

-- Third, consider seasonal timing. Lakefront properties often have distinct selling seasons when buyers are most active and can better appreciate the water access.?

Consider starting with Option 3, which includes a professional valuation and market analysis. This modest investment provides crucial data to determine whether minimal preparation (Option 1) or strategic enhancement (Option 2) will yield the greatest return. An alternative option is to conduct the research yourself. If the county has a GIS mapping system, the sales data may already be conveniently available. If you have been keeping track for 15 years, you may already have the data.?

Waterfront homes have a high appreciation rate because of the high demand but limited supply, so don't rush into assumptions that could cost you tens of thousands in potential sale proceeds. The "do nothing" approach works in some teardown markets, but lakefront properties deserve more strategic consideration given their premium nature.?

Your 15-year pattern of teardowns suggests strong developer interest in your area, which is valuable information, but combine this with current market data and professional guidance to optimize your specific transaction.?

Richard Montgomery is a syndicated columnist, published author, retired real estate executive, serial entrepreneur and the founder of DearMonty.com and PropBox, Inc. He provides consumers with options to real estate issues. Follow him on Twitter (X) @montgomRM or DearMonty.com.

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