A recent article in a Delaware newspaper described the federal spending on replenishing the ocean beaches at Dewey Beach. The project involves bringing in 300,000 cubic yards of sand for Dewey Beach, at a cost of $6,000,000. The project is bring headed by the Army Corps of Engineers. Dewey Beach is on a narrow strip of sand which separates the Atlantic Ocean from Rehoboth Bay, just south of Rehoboth Beach, DE. The article says that renourishment typically takes place once every three years.
I'm looking at a real estate listing on realtor.com for a home in the beach block. The asking price is a hair under $1.7 million, for a lot 40x125 (5,000 square feet, or 0.115 acre).
Here are the taxes and fees:
County Tax: $2100
Water Fee: $200
Sewer Fee: $200
So the carrying costs on this house are $2620 per year ... $218 per month.
But here's the interesting figure from the listing:
The federal taxpayer pays a significant amount of money so that that landlord can collect big bucks from his tenants and enjoy the off-season weekends on the ocean beach.
The $65,000 is mostly for the location, not for the (admittedly) very nice house. $65,000 is 3.8% of the asking price. $2620 is 4.0% o the claimed annual rental. Let's say that the landlords spend $10,000 a year on the rental agent, cleaning crews, maintenance. Let's also say that 2/3 of the value is land value. 2/3 of $65,000 is, roughly, $44,000 -- per year!
WHAT A DEAL!! Aren't we nice? And what do we ask in return?
Post script: The local community collects a 3% surcharge tax on rental income. So the landlord pays the community $2,620 per year, and the tenants pay $1,950!
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