If you are thinking about buying a beach house, you need to make that you know what you are getting into! While this can be a haven of peace, it can also be financial handcuffs for you if you are not fully prepared.
The prices for beach vacation homes are dropping these days, like most real estate across the country. People are drawn to the water and the ocean, so there’s a good chance that a beach vacation home will appreciate in value over the long-term.
Nevertheless, buying a beach vacation home is not the same as buying an inland vacation home. If you have never bought a property on the beach before, or if you don’t know the area, one of the best things to do is to team up with a good real estate agent that knows the area.
You’ll want someone with several years of experience in the location you’re considering, preferably someone who knows the unique nature of waterfront real estate. The first question to ask is how far you’re willing to travel to get to your beach home.
Think about how many times a year you would use your beach vacation home. Can you handle the cost for each visit?
Is it important for you to rent the beach vacation home part of the year? Make sure you understand the tax pitfalls of renting part time and enjoying it the other time.
It’s not a bad idea to find a comfortable hotel, condo, or home to rent for a period of time, on and off during the different seasonal periods prior to purchasing the home. This way, you can experience the day to day traffic and life around the area.
Ask your lender if you are allowed to rent the home when you’re not there. If you use a vacation home mortgage, also known as a second home mortgage, to buy the property, there may be restrictions on your ability to rent.
Vacation home mortgages typically have a lower interest rate than an investment loan, but an investment loan will give you complete flexibility in how you use the property. If you opt for a vacation home mortgage, be sure to get the rental rules in writing well before the signing to avoid any unpleasant surprises.
One benefit for having a place of your own is being able to walk right on the beach. There is nothing more Zen-like than gazing at a sunrise or a sunset on the mesmerizing waters while listening to the sounds of the natural sea.
The sense of calmness one experiences from living on the water will due do wonders to help lower your stress level. Waterfront homes typically have higher appraised values.
The investment will likely hold its value better than homes that are inland. To choose a home that’s more likely to retain its value, look in areas that are already well-developed and popular.
Beaches with derelict waterfronts or those with heavy investments in new condominiums won’t hold their value as well. You’ll have a guaranteed vacation destination each year, as well as a cozy getaway that you can use throughout the year.
Some people buy a place with an eye toward retirement, while others enjoy the additional income that comes from rentals. These purchases come with some downsides, however.
You’ll need flood insurance through the National Flood Insurance Program. Standard homeowners’ policies won’t provide flood coverage for waterfront property.
You’ll own a second home and all the maintenance costs that come with any home. Salt air takes a heavy toll on exteriors, and strong winds mean a shorter lifespan for roofing, so you’ll have higher maintenance costs than you would for an inland residence.
Beaches carry inherent risks. Red tide, aggressive sea life, or shipping accidents could render the beach unusable for a period of time.
This not only affects your ability to enjoy it, but it could also cause renters to cancel. Hurricanes and strong ocean storms could cause flooding or severe structural damage.
In some cases, you may be prevented from rebuilding a property that has been destroyed, if severe erosion or damage to a tidal wall leaves your property on a flood plain. Some locations are undesirable in the offseason.
If all the restaurants and shops close down at summer’s end, you could wind up feeling too isolated and have a hard time attracting renters. Now that you have more of a basis of facts, decide whether or not this sounds like a reasonable purchase for you!
Jack R. Landry is a resident of Las Vegas and has written hundreds of articles relating to tourism and real estate. He recommends (http://www.Tradewind-lv.com) for your next home in Las Vegas.
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