Buying a home on the beach can bring an excellent return on investment, a reliable income stream, and access to a charming vacation spot. Many beach house investors buy houses that they later rent during peak tourist hours. Creating a beautiful space for guests is one of the easiest ways to make money with your vacation rental. Not only does this improve the guest experience, but it's also key to good marketing if your guests post images of themselves in your home on Instagram, then you're doing it right.
For some of us, our favorite holiday memories are in the water, playing in the sand, jumping in the waves, swimming and looking for shells along the coast. So why wouldn't we want to enjoy those pastimes every day moving to the beach? It's no secret that buying a house on the beach is often a real estate dream. And, fortunately, it can be achieved. But like any major life decision, there are certain aspects you need to consider before diving headfirst into it.
Take a look at these common considerations to help you find the best place to buy a beach house and exactly what type of beach house is right for you. There are sandy and picturesque beaches all over the country. Your first priority is to decide exactly where in the U.S. UU.
You prefer to install that beach umbrella permanently. Where is the best place to buy a beach house? Some cities and regions to consider are the East Coast along the coasts of Maine and Massachusetts. There are also North and South Carolina. Florida is also a must-see, especially if you like warm weather all year round.
And, of course, California and the West Coast are natural selections. Another great but often less thought-out location? The Midwest. After all, a beach house can be anywhere there is water and sand, whether it's an inland lake or a rocky shoreline, right? Anyway, you're sure to get a unique view that will take your breath away. Speaking of different types of coastlines, what do you want right outside your door? Do you want perfect white sand or do you like rocks? Flat as far as the eye can see? Or dotted with dunes here and there? You should also determine if you want the beach right outside your back door or if you prefer a view of the beach from the other side of the street.
Do you want to take a walk to the beach? A bike ride or car ride to get to the water? The most important rule in real estate is “location, location, location. You can always update the interior or exterior of a beach house, but you generally can't move it to a better location. So think carefully about the type of location that best suits you and look in that area for a beach house that you want to visit frequently or live 365 days a year, including the coldest months, when the water isn't as hot for years to come. When you think of a beach house, you think of a view of the water, right? Well, what about those beautiful sunrises and sunsets? Ideally, you should watch the sun set over the water, so a west-facing viewpoint is important when looking for a home.
Sunrises can also be important, but they are somewhat secondary in terms of the value of the house when it is going to be resold. However, if you like the sunrise, look for a house on the beach where you are facing the water when the sun rises in the east. In addition to evaluating your budget for the purchase and knowing where you want the house, you'll want to know how much it will cost in the long run. Beach life, in and of itself, is expensive, so you need to be prepared and think about the additional costs you'll have when you live there, such as higher property taxes and beach home insurance costs, which can be higher when you're closer to water in many areas (think major flood insurance).
Also note that some beaches charge tolls to access them, even for residents. Another critical note is that places with beachfront properties are often involved in natural disasters such as hurricanes and floods, so you'll also need to be prepared with an emergency fund to repair or rebuild in the event of a disaster. Real estate prices tend to rise over time, regardless of the type of home, so owning a condo or beach house is a good investment. However, you'll need to factor in all costs, such as Homeowners Association charges, for example.
You'll also need to realize that if you're just buying this property as an investment, you'll likely want to keep it for at least five years or more to really get your money's worth. Combine your new relaxed, beachy lifestyle with a flexible moving option. With PODS, a portable moving container is delivered directly to the entrance of your home and, when it's ready to go, it's picked up and taken to your new home. You can pack and load (and then unload and unpack) at your own pace without the rigid schedules of a moving company or the hassle of dealing with a DIY rental truck.
The decision to buy a beach house is a big one, in fact, even if you are only looking for small beach houses or condos. But the benefits of such a purchase can also be powerful. A view of the beach can be serene but also humiliating. It can reduce your stress, show that your problems are smaller than you think, and give you a sense of peace about the world.
There are many reasons to invest in buying a beach house. If you're ready to let go, jump and live your best life on the water and sand, check out the PODS blog for help with moving tips, ideas for decorating your beach house and much more. Karen Dybis is a freelance journalist and frequent contributor to the PODS blog. His work has been featured in Time magazine, US, S.
News %26 World Report, The Detroit News and more. Save my name, email and website in this browser for the next time I comment. Before investing in a vacation home, take stock of what you are actually taking a vacation. If you're living the double-income childless (DINK) life, then it might be easier for you to escape than if you had children, a dog, and errands you need to do on a regular basis.
Fortunately, you can hire a property manager to at least take care of your vacation property while you're away. Even before you commit to buying your vacation property, ask yourself if you want your property to serve as a rental when it's not there. If your home is big enough for you and your family, then its rental appeal decreases considerably. So, check with a local real estate agent and find out what type of property to invest in.
However, keep in mind that the criteria for obtaining a loan for a rental property are more stringent than for obtaining a loan for a primary residence. This is because the lending institution is taking a higher risk by virtue of lending money to a property that is simply more likely to default than its primary property. Therefore, expect to make a larger down payment, need a higher credit score, and undergo a more thorough investigation of your past finances. If you live near water, it's not a question of whether a big storm will occur, but rather when a big storm will occur.
You'll need flood insurance, the cost of which will depend on where your home is located. This is something you should research before you even buy a home, because with sufficient expenses, your rental property can generate a negative income, and that is simply an unfeasible plan. There are certain benefits that the IRS makes it easier to use a vacation property as a rental property. You just need to know some tax rules.
If you want to use your vacation home as a rental property, you can only use it yourself for a limited number of days, while still being able to deduct expenses. You can use your rental property yourself for 14 days or 10% of the total number of days the property is rented at a fair rate. Therefore, if the property is rented for 200 days, you personally cannot use it for more than 20 days. Don't deposit in your rental income that covers your mortgage in full.
In addition to unforeseen events, you should also consider vacancies in your budget because there are likely times when you don't have tenants. When things get tough, difficult ones become difficult to rent, but a beachfront property isn't likely to be where people rent when they experience financial hardship. Instead, vacations decrease, so you may find yourself with a financial sink. In which direction is the wind blowing and in which direction does your house look? You should know this because the answer to this question can determine how much damage your home suffers during a storm.
You'll also want to know which path to take when the sun rises and sets, because you might find a home that has walls in both directions instead of balconies, depriving you of the views that inspired your purchase in the first place. The popular vacation destination Gulf Shores, Alabama, is at number one on this year's list of profitable beach markets. For those who would like a detailed financial picture, I have included an estimated pro forma financial statement below for a typical Mission Beach home or condo. These beach towns are the ideal place to start investing in beach rentals because they will have a higher potential for property income.
This week's graph shows the 10 most profitable areas for beach rentals according to Vacasa's analysis, as well as the average home price and average gross income (before expenses) per rent in each. Let's look at what it takes to invest in a vacation rental in a beach house that successfully generates a stable rental income. If you're considering buying a beach house anywhere in particular, it's best to do a little more research on local vacation rental laws and regulations before making a big investment in vacation rental properties only to get caught up in government bureaucracy. If you are willing to work to find a profitable location and spend time finding a property with great income potential and are willing to use tools such as vacation rental software to help boost your property management, it would be a wise investment to buy a beach home.
Similarly, while a beach property thrives in the summer months, if there isn't much more to do in beach towns, your rental income will suffer during the colder seasons, when guests aren't as keen on going to the beach. If you commit to the beach experience, your beach rentals can't be far from the real beach. Vacasa's most recent Vacation Buyer Report shows 42% of buyers are looking to buy a vacation home in a beach destination. But is a beach house a good investment? What's more, is it worth investing in a beach house for income as a vacation rental property?.
You should also determine if you want the beach right outside your back door or if you prefer a view of the beach from the other side of the street. . .