Evaluating of Shared Waterfront
The concept of shared waterfront incorporates many different waterfront-sharing situations. Establishing the value of the share isn’t as simple as dividing the overall value of the waterfront parcel by the number of shares…although that’s a good start.
The term “shared waterfront” has been used to describe everything from a private parcel shared by two owners to one shared by an entire private community of hundreds of owners. The value, as you can imagine, is much different in each of these situations.
Valuing the Waterfront Parcel: Establishing the value of the shared parcel itself is the first step in determining the value of a share. Like assessing the value of private waterfront, its rarity, location, waterfront access, maintenance cost, and amenities like docks and available moorage all play a role in determining value when compared to like parcels.
- Rarity: Waterfront shared by only a few parcels is much harder to find than a private community beach shared by many parcels. Rarer still is one with a dock and deeded moorage.
- Location: Value will be influenced by where it sits on the map and the properties surrounding it.
- Waterfront Access: Being able to easily walk to the shared waterfront adds to its usability and value. If driving is necessary to access it, is there readily available parking? Can you easily launch watercraft? If not, where is the nearest launch access? What limitations on access exist?
- Maintenance: The cost of maintaining the parcel of land and any docks, bulkhead, and access trails or roads is a factor in valuing a share. What is the present condition of these features? What are future anticipated expenses? How are these expenses shared or assessed?
- Docks and Moorage: A dock adds considerable value to a waterfront parcel by expanding its use and functionality. Temporary, rotating and deeded moorage each add value to both the shared parcel itself and to the individual parcels based on how they benefit.
Valuing Each Individual Share: Once you have determined the value of the waterfront parcel, looking at the number of shares is the next step in determining each share’s value. But, not all shares are created equal. Some will have better access than others.
Often, limited by dock size, some parcels will have deeded moorage while others won’t. And for those with deeded moorage, some will be premium spaces while others are less than ideal. Some shares utilize an annual lottery or rotation system for assigning moorage.
Weighing the value of the individual share’s amenities and benefits is essential to understanding how the share contributes to the value of each individual property. This establishes each share’s percentage of value in the waterfront parcel.
Valuing shared waterfront is far more complicated than it looks. Following a process to arrive at value lessens the risk of overlooking key elements. Utilizing a knowledgeable waterfront appraiser or local real estate broker is a savvy strategy when valuing any waterfront parcel or shared waterfront parcel.
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© Copyright 2019. Information and statistics derived from Northwest Multiple Listing Service.