Daniel Johns…,  in Mitchellville, MD

Owner on West Ave, home is outdated ... any ideas on costs of tearing down and rebuilding? Home on track to a lame duck. What are permit reqs, etc...?

Asked by Daniel Johnson, Mitchellville, MD Wed Oct 27, 2010

Looking at a few options...a) remodel (not a fan as we do not have central heating/cooling) b) tear down and rebuild ... looking to get an idea of the costs and hurdles c) maintain and slowly lose rentals as we become obsolete.
Home is very old, has year round renter upstairs (I'd also need to know how to go about alerting them sufficiently should we rebuild). Don't really have an agent to ask just looking for input and advice from those who may have been in the same position with their outdated home...we are the last of a dying breed on the island ... home is right across from blitz's on 21st.

Thanks

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Daniel,

It looks like you have pretty good size lot for the area. The first thing you would need to do is to check the zoning on that block. I have a zoning map at my office or I would be able to give you that info.
Once you know what you can build without a variance,you will have a better idea of what is possible.
You mentioned that you had tenant in the top unit. Is is a legal duplex? If so that could give you another option.

There are builders that I do business with that would do joint venture and possibly build out a duplex and give you a unit for your contribution of the lot. Providing that a duplex can go back.

Your question about the tenant is touchy. I do alot of Bank Foreclosures and that is the biggest thing we hope not to deal with. The banks will try to offer the tenants money to leave before the lease expires.


Wether or not to rebuild depends on a alot of factors. Does the property have a large footprint ? Would you get more square footage if you rehab?Will the city not allow you to rebuild the size bulding that you think makes it worth doing? In most cases it makes more sense to pull down the old building and just build new. You will have the ability to customize a little and not worry about spending your summer fixing things.

If I can be of any help, let me know. I've done alot of building in Cape May County and I have a few good builders you can talk to and a local architect.

Edward ( Augie ) Augsberger

Weichert Coastal

609-338-1189
0 votes Thank Flag Link Wed Oct 27, 2010
Hi Daniel,
The remodel vs. rebuild question is a tough one. If I have the right property, yours is in the Bay West single family zone on the north side of 21st St. Right now, the land value where you are is $400-450K; a finished new construction single at that location is going to sell under $900K in this market, if you wanted to develop and sell. Probably make sense to go 3000 sf or so at $150/sf so $450K build out to get quality construction, so there is no real money to be made. If you want the place for your family to use, this might make sense at some point. Right now the builders are hungry so you may be able to reduce your build cost quite a bit.

Problem is, you now have a duplex, which you would lose if you rebuilt. You would have to apply for a use variance to rebuild, requiring 5 of 7 votes on the zoning board. If even one neighbor did not agree with what you wanted to do, you would lose. Additionally, the city is averse to granting use variances to start with. I am very familiar with your zone. I represented the first developer to build under the current code, and we helped the city finalize what their language meant, which was not a pleasant process for anyone. Based on the neighborhood hot buttons as I see them, building a new duplex at that location is probably not an option.

If the building is structurally sound, the better question is whether you can do anything with it to make it more livable. I was faced with exactly this issue with my 1972 duplex in a different single family zone, so I understand the issues. You have a crawl space so putting central air and heat in the lower unit is easy, but finding a place to put the air handler inside may be difficult and it may cost you a closet. Another option is to go some of the new Mitsubishi units that take up less space inside and are highly efficient. Upstairs, if you have an attic space, you have room to add heat and air from above.

How is the interior layout? Does it work for you? If so, maybe deal with the hot and cold air issue then begin upgrading bit by bit. Right now you have an upstairs tenant paying some of the freight, and if you can improve the downstairs without moving the tenant, you may want to do so. If you decide to demolish, that is one of the few ways to get rid of a tenant in NJ. At the end of a lease, you can raise the rent, decide to move in as your primary residence, or decide to demolish. Otherwise, it is difficult to remove a tenant who follows the rules and pays on time.

In summary, if you want/need a duplex, the best approach is to work with what you have. If it doesn't matter, and you want to keep the property for the family, figure out whether the existing space works for you or whether you want a single family. You can also think about taking over the whole building by persuading the tenant to leave. If your tenant is month-to-month and you want to demolish, my understanding is that 60 days is sufficient notice. You can only demolish Sept - May in Ocean City.

Depending on your current footprint, you may be able to expand in some way. The zone does allow 2.4 stories of living space and the city has allowed non-conforming uses to expand within the bulk requirements, so you may be able to add a partial level and another bedroom and bath on the top unit.

Regarding losing rentals, when I bought my place I had to work to get $1400 a week for my first floor; I now get $2200 and turn people away. I still have room AC down there (at tenants' request...moms like it one temp and teens like another) but new kitchen, new bathrooms, great paint scheme, new furnishings, and spotless. Each year I improve something, and I am thinking about raising my rates again.

Hope this helps. Good questions!

Joan Farrell
Monihan Realty Inc.
http://www.joanfarrell.com
0 votes Thank Flag Link Tue Nov 23, 2010
I know what the zoning is at your location. I would love to have the opportunity to discuss your goals and possibilities on this location. Depending on what your goals and timeline is has a lot to consider with the outcome. We will give you a free consultation with no obligation. I would love to meet with you or talk on the phone. I am a realtor/builder in Ocean City. We just completed a new construction project at 2820-22 West Ave.
You can contact me at 609-602-7140 / ocjack@kw.com / http://www.ocjack.com
By the way, we can also help you with your rental needs and situation with your tenant. We have also done this before as well.
Thanks for the opportunity.
Jack Zaborowski
Keller Williams Oceanside Realty
0 votes Thank Flag Link Thu Oct 28, 2010
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