If you are looking for the perfect vacation house, a beach house would be perfect for allowing you to enjoy your vacation and be near your favorite coastal town.
Oftentimes our best vacation memories occur near the water where we play in the sands, jump in the waves, swim, and search for the seashells along the coastline. So, why not relocate to the beach and rejoice in these pastimes every day? But even if you don't intend for a beach house to be your main residence, it can still be a relaxing 2nd property that will allow your vacation periods to be organized more quickly.
Purchasing a beach house may seem to be only a dream for most people, but this real estate fantasy is more attainable than people think. Like any crucial life decisions, there are a few aspects you must consider before buying a vacation home in a coastal town.
Benefits of purchasing a beach house for investment
Here’s why you should invest in a beach house:
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Rental benefit: A big advantage of purchasing a beach house is the possible rent money you can earn from it. A vacation rental will generate more profit than other customary rental properties since vacation rentals are typically more expensive. So even if you don’t use your vacation house often, it can provide a financial benefit
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Tax advantages: If you own a vacation house, you can dismiss business-related costs like property management charges, mortgage interests, repair expenses, insurance fees as well as property taxes. We suggest you talk to a local real estate attorney in your area to determine the tax deductions that would apply to you.
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Property recognition: The worth of a real estate property usually rises with inflation. Therefore, the worth of your beach house will likely increase significantly in the long term.
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Personal usage and fun: Since a beach house will be your second home during the vacations, you can save a lot of money that would’ve otherwise gone towards paying for hotels.
If you rent out your vacation house and utilize it yourself often during vacations, the house will pay itself off in due time.
Drawbacks of purchasing a beach house for investment
Here’s why you shouldn’t consider a beach house as a worthy investment:
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Big down payment: When purchasing a second home, you can expect to pay something between 20% to 30% as a down payment. Also, credit score requirement will be higher for purchasing a vacation home.
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High repair and maintenance cost: Maintenance costs are higher for short-term rental properties compared to normal rental properties. Also, short-term rentals have a lot of visitors coming and going which increases the risk of your property getting damaged.
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Extra expenses: If you own a vacation house, you will have to bear multiple additional expenses. Apart from paying the primary rental cost, you will need to bear expenses like taxes, insurance, management fees, as well as mortgage fees. If you are using a short-term rental website, you will need to pay a fee to that website and also bear the cost of any additional permits and utilities required for landlords. Moreover, if your beach house is in a different location that is significantly far from your primary residence, you will need to consider the travel charges you will incur for travelling every now and then to check the property.
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Time-consumption: A vacation house property will require lots of maintenance and management which makes it very time-consuming. Here’s what you need to know about that:
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You will need to manage the check-ins and check-outs of guests, housekeeping, restocking, and any queries/issues faced by the guests.
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You may need to recruit a rental property manager who will handle all the above for you This will be an additional cost, however.
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Higher risks: If you consider buying a beach house, there are various risks you will need to be aware of Floods and hurricanes can cause severe damage to your rental property, as well as other natural damages. We recommend you purchase an insurance plan that covers every risk if you decide to buy a beach house or any rental property with high damage risk.
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Absence of flexibility: Going to your vacation home for the first few years will be an exciting experience. However, the same old scenery and location may seem monotonous after many stays, and you may want to visit a new location during the next vacation.
Overall, buying a beach house can be a worthwhile investment if you have the appropriate finances to purchase, insure, and maintain it. If you are planning to use it as a vacation house, make sure you visit it regularly. If you plan to live there throughout the year, you must check the different amenities available as well as any good employment opportunities nearby.
Here’s what you need to know before you consider buying a beach house to bring the best out of your vacations:
Explore the location
Consider how much time you’ve spent at the place where you are planning to buy a beach house? If you haven’t spent much time at that place, you can simply rent a house somewhere near to the location and get to know the place and your neighbors before committing to home ownership. Here’s a list of a few things you must find out about the location before buying a beach house there:
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Check if the house is in a convenient place and if it would be easy for you to travel to remote areas from its location.
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Check how close the airport is to the location where you are planning to buy a beach house.
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Make sure there are good hospitals and medical facilities near the location of your beach house.
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Check for grocery shops, restaurants, shopping centers, and museums near your location. Otherwise, you will incur additional travel costs if you need to restock on necessities.
Learn about your neighborhood
Neighbors are crucial since they will help you explore the place around you and be acquaintances for the foreseeable future (maybe even friends). If you have kids, it’s a good idea to check if there are children in your neighborhood as well who can be their playmates.
Also, you should refrain from buying a beach house in a highly isolated area as this could attract robbers or burglars. Also, if there’s an emergency it will be difficult to access necessities and tools in a secluded location.
Contact a local real estate agent
Purchasing a beach house can be daunting unless you are aware of the whole process. You can hire a real estate agent who can find an ideal beach house for you and assist you throughout the process. Your realtor, as well as your real estate attorney, will also voice your opinion to the seller's team and act as a messenger who can pass on your thoughts better than you can.
You should hire a local real estate agent who has proper experience in purchasing and selling beach house properties since their experience will help them understand what you’re looking for and what sort of questions they’ll need to ask:
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A real estate agent can give you a complete idea about the peak moving seasons and off seasons.
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A realtor will also have good knowledge about the history and weather conditions of the place where you are looking forward to relocating.
Home inspection tips
If you are buying a beach house, hiring an expert for home inspection will be very important. Here’s what you can expect from a home inspection professional:
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An expert will look for any indications of wear and tear that have happened naturally due to aging or sea storms.
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A house inspector can tell you if the house in question has been flooded or is at risk for flooding.
Floodwater has the potential to damage the foundation of the house, rot wood, cause mold, and incite damage to the electrical system. Such damage is a major issue, and it will cost lots of money to get them repaired. We suggest you skip buying a beach house if it has a history of getting waterlogged frequently.
Another idea would be to talk to the contractor and get the house elevated if you could afford to implement such a high-budget project. Many homeowners in the coastal areas have raised their houses, keeping their houses safe from water logging in the future.
Book a land surveyor or an engineer
Make sure the engineer notes down the highest level of the ocean tides and if the sea experiences high tides constantly. If this is the case, you should avoid buying a beach house in such a risk-prone area.
A land surveyor should be able to investigate the stability of the seashore as well as the land around it. Also, he can check for erosion and do research on storm surges and tides which is valuable information for you.
If you are looking forward to buying a beach house, we recommend you start preparing from the beginning.
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Choose a safe location for buying a beach house.
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Make sure there is sufficient greenery around the house, including numerous trees and grasses. This will indicate that the place has a good drainage system.
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Avoid buying a beach house with a recently created lawn since it could indicate that the homeowner is hiding a larger problem.
Off-beach vs. Front beach properties
You'll need to decide if you want a vacation house directly on the sea or if you want to buy one which is a few blocks away from the beach. If you buy a vacation house with a sea-front view, you will have to pay a few dollars more than what you would have paid for a house a few blocks away from the sea.
A sea-front house would be highly susceptible to storms or weather-related damage. It will be very costly to get your vacation home in a coastal area insured because of the high natural risk.
Purchase what is feasible
You must not cross your budget while buying a beach house or a vacation home for yourself. Here are a few things you should keep in mind:
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You must contact your financial experts and find out both the pros and cons of purchasing a house in a coastal area.
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Find out if there are any specific guidelines you need to follow for buying a beach house.
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You must check whether it would be financially sound for you to buy a vacation house. We have discussed a few additional expenses in the earlier part of this guide.
Cost of beach house insurance
Homeowners' insurance on a beach house is costlier than insurance policies for standard homes. The spike in the insurance rate is due to the compulsory flood insurance you will need to purchase. A surge in insurance rates has occurred across the board, especially on the East Coast, where large-scale damages have occurred due to hurricanes.
If you are buying a beach home in Florida, you will have to pay an annual premium of approximately $10,000. However, if you are buying a vacation home in North Carolina or any East Coast area, you will have to pay an even higher premium. Meanwhile, if you move to California, you will have to pay an insurance premium lower than what you would pay for insuring a beach house in the East Coast area.
Are you moving?
If you have decided to relocate to a beach house, there might be other aspects bothering you. You may not know what you should move to your vacation home and what you should keep in your primary home. Amidst all these tensions of organizing things, you might not have enough energy to pack your belongings and move to your holiday home.
We suggest you hire professional movers, who will help you move easily and smoothly. Perhaps you can take the quotes from a few moving companies and choose what suits your requirements and budget.