Buying a home on the beach can be an excellent investment, providing a reliable income stream and access to a charming vacation spot. Many beach house investors purchase properties that they later rent out during peak tourist hours. The decision to buy a beach house is a big one, and even if you are only looking for small beach houses or condos, the benefits of such a purchase can be powerful. A view of the beach can be serene and humbling, reducing your stress and showing that your problems are smaller than you think. There are many reasons to invest in buying a beach house.
If you're ready to take the plunge 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. Buying a beach rental is not a get-rich-quick investment. It takes time and money to run a successful vacation rental business. However, once you reach your stride, investing can be very lucrative. Before investing in a vacation home, consider what you are actually taking a vacation from.
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 or not a big storm will occur, but rather when it 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 negative income - 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 fair rate.
Therefore, if the property is rented for 200 days, you personally cannot use it for more than 20 days. Don't forget to factor in 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 beachfront properties aren't likely to be where people rent when they experience financial hardship. Instead, vacations decrease so you may find yourself with an unexpected 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 storms. You'll also want to know which path the sun takes when it rises and sets because you might find yourself with walls in both directions instead of balconies - depriving you of the views that inspired your purchase in the first place. There's nothing worse than promising beach vacations when your beach rental is actually 30 minutes away from the sea.
Similarly, while beach properties thrive in summer months - if there isn't much more to do in beach towns - your rental income will suffer during colder seasons when guests aren't as keen on going to the beach. On average, beach properties attract higher rental income than those that don't offer beach services or something similar. But is investing in a beach house worth it? What's more - is it worth investing in one as an income-generating vacation rental? If you're considering buying one anywhere in particular - it's best to do some research on local vacation rental laws and regulations before making such an investment only to get caught up in government bureaucracy. The secret to the popularity of Galveston vacation rentals has already been discovered - but near Surfside Beach there is an alternative Gulf Coast destination that is rightly drawing attention as an alternative destination. If you commit to the beach experience - make sure that your rentals aren't far from the real thing!If you are willing to work hard to find profitable locations and spend time finding properties with great income potential - as well as using tools such as vacation rental software - then investing in a beach house can be very rewarding!.