Buying Waterfront Property: 5 Due Diligence Tasks Before Pulling the Trigger

 

Buying a home is a dream come true for many.

To purchase that property with river, lake, or oceanfront access may top the list for many individual’s American Dream.

From personal relaxation, giving your family all that waterfront property has to offer, and the possibility of major returns on investment, it’s hard not for the pros to outweigh the cons.

But before plunging into buying your dream house, just take a few minutes to consider these challenges surrounding the purchase of waterfront property.

Observe the Property Closely

When it comes to buying a waterfront property, the most important thing to consider is the land  and not the house or structures currently on it. Altering the structure is easy, but the possibilities of altering the land itself is much more complex.

The land itself can have many impeding factors for existing or future development, so don’t hesitate to hire talented engineering, ecological or soil experts to evaluate your potential purchase.

In addition to the land itself, make an effort to learn more about the surrounding areas tourist activity, potential neighbors’ use of the land and water, and any future development. The last thing you want after a waterfront land purchase is to find out your plans and investment are hindered by factors out of your control.

Check Insurance Requirements

Unlike normal land or homes, waterfront properties often come with their own set of insurance requirements. Some factors mentioned above can have outsized effects on your homeowner insurance premiums, as well as additional flood insurance costs.

You can get more details from the National Flood Insurance program here.

Even though the amount may vary, it is always better to be covered when a massive flood causes thousands of dollars damage to your home.

Another type of insurance that you might be wise in investing in is wind insurance. Your properties geography and the makeup of the surrounding land mass may cause increases in wind speeds.

All of these insurance requirements can be estimated with early due diligence on your potential waterfront investment, so begin diving into pricing them out as early as you can.

Check Legal Factors & Requirements

Waterfront property often comes with additional legal factors to consider, depending on your planned use or activities on the land. Understanding these legal factors will save you time and headaches, so don’t neglect this due diligence task.

Your State government will have guidelines and laws around building additional structures like docs, sea walls, boat houses and even guest houses.

Hiring a reputable real estate lawyer will give you give you piece of mind and help guide you while planning for this investment.

Assess The Value Of The Waterfront Property

Although this might be the first thing you consider before investing in a piece of waterfront property, you might do well to check on the first three tips first. Each may have a significant effect on the value of the property, which will help you decide whether to purchase the land or even provide you with additional information for price negotiation.

Oftentimes the value can depend on the availability of water sports activities, proximity to the waterfront, and even distance from municipalities, stores, schools, etc…

Put major effort into assessing the value of your potential waterfront land, the existing structures, and the surrounding property values and you’ll save yourself from losing money on the investment.

Hire a Real Estate Agent                                                                         

The right real estate agent can provide intangible knowledge and support during the entire investment process, so don’t balk at finding the right help.

Local knowledge, connections, and even friendly repartee amongst the homeowners and other real estate agents can all be contributing factors to a successful property investment. Hiring the right agent will also save you a lot of time and effort in the long run, so take the opportunity to hire the best agent you can find.

The tips above are only the beginning of the necessary due diligence when investing in waterfront property, but starting with these five will get you off on the right foot.

To view Northern Michigan Land Brokers current waterfront properties, click here.

New Laws Affect Register of Deeds

 

There are two new laws recently enacted which affect the recording of documents with the Register of Deeds, which will go into effect on September 18th. Learn more regarding these changes at the links below!

PA 194 requires that a trust agreement be recorded as a separate document when accompanying an instrument (or document) affecting someone’s interest in real property. To view PA 194 in its entirety, click HERE.
 
PA 195 requires a death certificate be recorded as a separate document when it is being recorded concurrently with a deed or other document conveying an interest in property by the survivor(s). This would apply to a surviving joint tenant or tenant by the entirety transferring an interest in land. To view PA 195 in its entirety, click HERE.

Waterfront Property Listings – August 2018

 

Indian Lake, Manistique

As we head into late summer here in the Upper Peninsula there are still a lot of great waterfront properties on the market. We currently have some amazing properties available on Lake Superior, Lake Michigamme, Portage Lake, Chocolay River, Twin Lakes, Copper Harbor, Sand Lake, Rice Lake, Perch Lake, Blue Lake, Bass Lake, Menominee River, Lake Pellisier, Sturgeon River, Lake Michigan, Torch Lake, and more!

Contact our agents today and we will match you with your perfect waterfront property.

Click here to see all of our currently available waterfront listings in the Upper Peninsula.

 

 

 

 

Log home on Lake Michigamme
Lake Superior, Big Bay

Make More Money Off Of Your Timberland

Make More Money Off Of Your Timberland 

July 20, 2018/

Timber prices are at a record high. The tragic wildfires of last summer and trade disputes as well as an increase in demand for new residential housing have all caused the price of timber to skyrocket. With low supply and high demand, timberland owners are sitting on a potential gold mine. To make the most off of the high prices, you’ll need to tread carefully. Here’s how to make the most out of the booming market.

Check The Timber Mills

Is your local log mill looking for a particular kind of log? Many mills are willing to pay extra for logs that meet their specific standards and may dock your pay if they do not. Some mills even pay less for logs that are larger than usual. This means you are getting less money for more timber! Scope out the pricing of your local mills to find out where your tress will make the most money.

Long-Term Gain

Patience is the name of the game when it comes to timberland. Prepare to lose money for the first few years because you will need to spend money planting and taking care of the trees. Since timber doesn’t provide immediate returns, many people might be hesitant to invest.

However, timber has historically produced strong long-term returns. Many financial websites, such as CNN Money and Investopedia, recommend investing in timber as a way to diversify your portfolio. The returns tend to move countercyclically to other markets, providing your portfolio with a safety net. Not only is investing in timber a smart financial move, it is a good investment in your land. Timber is a hearty, relatively low maintenance tree that will produce steady returns for years.

To Cut Or Not To Cut?

When you cut your trees doesn’t only impact your current crop, it will also determine the growth and health of the next generation of trees. With prices at a record high, it can be tempting to cut down your trees as soon as they mature. Try to plan harvests around times that would benefit the saplings as well as when your timber is at its highest value.

Best Practices

Taking care of your timber now will result in high-value trees down the road. Regular thinnings, regeneration harvests, and timber stand improvements (the culling of undesirable trees and saplings) are all practices that result in healthier (a.k.a. more valuable) trees. Healthy trees mean healthy saplings and a whole new generation of high-value trees. It’s a never-ending cycle of profit!

Sky-high prices and an increasing demand have created a modern day gold rush. Although it can be tempting to chop down all your trees and cash in on the craze, long-term planning is the best option for you to make the most money off of your timber.
To learn more about timber, be sure to check out the newly updated LANDU course Timberland Real Estate on August 1st being hosted by the RLI Alabama Chapter.

This article was originally posted to the National Land Realty blog.

About the Author: Laura Barker is the Membership and Communications Specialist for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.

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