Are You Ready to Buy a Beach House?

Here's how you can easily tell
Ryan Hanley headshot photo. Written by Ryan Hanley
Ryan Hanley headshot photo.
Written by Ryan Hanley

Ryan Hanley is a public speaker, podcaster and author of the Amazon best-seller, “Content Warfare.” Ryan has over 15 years of insurance expertise.

Boy running on the beach

The beach home bug can bite when you least expect it. Many people show up for a vacation on the coast with no notion of buying oceanfront property. But a few days on your favorite stretch of sand can make you start to look around and wonder, Should I buy a beach house?

Buying beach property can be a great way to secure a peaceful getaway or retirement home for yourself and your loved ones. It can also provide a little extra rental income in the off season. But buying a beach house can prove much more complicated than it might seem at first glance. So here is a list of preconditions to consider before you take the plunge.

Your finances are ready for a beach house mortgage.

You can get a better price on a beach property if you have cash in hand, because sellers like the certainty and speed of a cash sale, according to Coastal Living. If you must finance a beach house, your primary home mortgage payment and the beach house mortgage payment combined must take less than 33 percent of your income. 

You will also need to put down at least a 20 percent down payment. If you feel that the combined load of your home and your beach house would be a stretch financially, it might not be a good time to buy.

You are prepared to cover the monthly costs yourself.

It's not a good idea to count on rental income to recoup the monthly costs of beach home ownership. Some oceanfront properties turn into successful rentals, but many do not. Forbes reports that cities like Miami, which were hit hard by the recession, have too many foreclosed homes in the area, leaving the rental market full of openings. 

That's why it's important to shop the local real estate markets just as shrewdly as you shopped for your first home. Find out about trends in local home sale values and the rental market before buying anything.

You can afford higher insurance premiums.

Oceanfront property is one of the most difficult types to insure properly. Your new beach house will face risks from flood, hurricane, erosion, and mudslides, depending on where you buy. The best way to find out about the price of flood, hurricane, and homeowners coverage for your beach house is to talk with a local independent agent. 

Our agents are independent, which means they can shop around to find you the best price possible. They also know the area well, and can help you make sure you've covered all the bases as thoroughly as possible.


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Our independent agents shop around to find you the best coverage.

You don't need it to perform as an investment.

Many finance experts will tell you that the housing market has changed since the bubble burst. Real estate is not the investment it once was. In fact, there are a number of ways to lose money on a beach house. 

Zillow notes that even if you plan to wait out the slow housing market gains by renting the property, you will typically make 4 to 10 percent less in rent than the cost of ownership, and the gradual net loss will eclipse any increase in the home's value, in many cases. According to Zillow, you might be better off choosing another type of investment entirely, if your goal is to turn a profit.

Your schedule will allow you to use it.

It's one thing to own a beach house, and another to get away from the endless list of work demands, kids' sports events, home repairs, and school schedules for a few days of peace and quiet at your second home. Coastal Living magazine recommends that you take a good hard look at your current work and play calendar, and decide whether it's worth the energy and expense to buy a beach house. 

If you plan to rent it out, you will also have to make time for finding and screening tenants, keeping up the property, and dealing with unscrupulous renters from time to time. Or you can pay extra for the peace of mind a good rental property manager can bring.

You are willing to do your homework.

To find a new beach property that's a blessing and not a curse, you will have to do a lot of research. Forbes notes that you will need a geological evaluation, to find out whether erosion will cause your investment to disappear into the ocean in the next thirty years. You will also need to research the local schools, housing market, and neighborhoods, and hire a competent inspector to perform a thorough investigation into the home's structural integrity.

So is it time for you to buy a beach house?

Maybe. In many parts of the US, it's a buyer's market. If you feel that you've found the second home of your dreams, give it the same due diligence you gave to your primary residence. Find a local real estate agent you can trust, and talk to an independent insurance agent in the area as well for affordable home insurance. Then you can be certain you've got a vacation home you can enjoy for years to come.

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