The value of lots increased dramatically during the price run-up between 2003 and 2007. They have not come all the way back down, but have significantly decreased to the point that there are significant values to be had, especially if you have a long-term horizon. Using Cape Coral as a surrogate for the other communities down here, I’ll explore some of the factors you should consider; there will always be specific considerations for each community (and even parts of a community) that aren’t covered. Again, a real estate pro is indispensable.
Lot size in Cape Coral is 40 feet x 125 feet, with some slight variation possible due to street placement or other factors. You can’t build anything on a stand-alone 40-foot lot. It takes two of these lots to make a building lot which is usually 80 feet’ x 125 feet. The plotted, 40-foot lot may be added to the building lot to make what is called a “three lot site” or combining two building lots will make a “four lot site”. If you want a bigger house or just more room around you, it’s an option. Our focus will be on building lots.
Don’t plan on selling the vacant 40-foot lot on a three-lot site unless the sale is to the neighbor adjoining it on the other side. Vacant building lots don’t have the same restrictions.
The upkeep and carrying costs on a lot are minimal. Mowing and taxes are about it. Cape Coral will charge you a small fee (less than what you would pay to a private party) to mow your lot. Lots in other areas may not have this service available; mowing will be up to you. Once in awhile, there may be problems with people dumping stuff—sometimes really odd stuff— on your lot. For instance, someone set fire to what looked like landscaping equipment down the street from us. Possibly the result of excessively competitive spirit between lawn-care people. It will be up to you to remove it if it is on your lot.
Value of a lot is affected by its water exposure, location, and utility availability. That is, is it located on a canal or lake? How wide is the canal or lake? Does that canal/lake have access to the gulf? Are there any bridges (if not, these are often referred to as “sailboat access” canals)? Is the canal fresh or salt water? Are city water and sewer lines extended to the lot?
The least expensive lots will generally be off water and/or in areas not yet included in sewer and water plans.
As for the cost factors:
Salt water basin in Cape Coral
- Sailboat access lots are the most costly, followed by other salt water access canals, the value of which will decline according to the number of bridges between lot and open water and the width of the body of water on which the lot is located. In other words, its degree of water exposure matters. A sailboat access lot on a salt-water basin, which is a small lake at the confluence of several canals, if you can find one, is the most expensive.
- Fresh water canal
Fresh water canal or basin lots form the next price tier. Their relative value is set mostly by the degree of water exposure (that is, the width of the canal or basin). Location counts, too, as a nice canal or lake behind a shopping mall or next to a major thoroughfare may not be what you or anyone else had in mind when you thought about South Florida. Weedy canals with collapsing banks are also a turn-off.
CANAL WEIR
In Cape Coral, fresh-water canals are separated from salt water by a system of weirs. The weirs act as flood-control devices, as well as keeping the fresh water canals at a higher level (to the right in the photo) than the salt water ones. This keeps the salt water from infiltrating the fresh water system and, at the same time, it keeps you from going from one to the other by boat.
If you own a boat, you will be limited to idle speed because all the canals are “no wake” zones. This is to reduce bank erosion and damage to seawalls, docks, and moored boats. So, if you had visions of water skiing down the canals or blasting along in your personal watercraft or bass boat, get over it. That’s what the lakes and basins are for. Just idle up the canals to get there.
- Off-water lots are the least expensive. The pricing considerations are pretty much the same as they would be anyplace else: proximity to schools, stores, traffic in and around the neighborhood, general condition of the neighborhood, and zoning (single family, multi-family, commercial).
Utility availability in Cape Coral means whether the city water and sewer system has been extended to the lot and the assessment charge for the extension paid. If not, you may be hit with an assessment in the neighborhood of $17,000 to $20,000 or more per building lot (half that for each 40-foot lot) when it is. These charges apply to the lot, not to the house.
- When a house is built on the lot, an additional cost will be incurred to connect the house to the system. The contractor or homeowner is responsible for installation and maintenance of this connection and the sewer and water lines on the property.
- Unless you’re made of money and don’t care, make sure you know when your lot’s area is scheduled for extension. As it sits in 2009, Cape Coral’s southeast, most of the southwest, and parts (mostly in the south of those areas along Pine Island Road) of the northeast and northwest areas are already in the system.
- Even if water and sewer are already extended to the property, be sure you are aware of any remaining assessments not yet paid that can be passed on to you because many have elected to pay the assessments on an installment plan. Before you buy, I suggest you learn what payment options you have to cover these costs and come up with a tentative plan.
- Other considerations when building include a burrowing owl nest on your lot during its breeding season. In Cape Coral, you’ll have to wait. You may see yellow tape on some lots surrounding a patch of grass: that’s usually a marker for the nests.
Always ask about remaining assessments or any other charges that can be passed to you. Other such possible costs include back taxes, city imposed charges for clean-up, and others.
As to determining the price, you need to check the price on several comparable lots, even those not actually listed for sale if possible, before making an offer. You will find that the prices may be all over the place with no apparent basis in rational thought. For example, if you are looking at a particularly nice canal, lake, or neighborhood, check the prices on all the lots you can find there. You might be surprised.
Buying a lot means one of two things: you either think you will someday build on it, or you will hold it as an investment and sell it later at a profit. Obviously, you can start out Buying a house.
OK. You’ve digested the information on lots. All of it applies to houses, too.
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