What to Look for When Buying a Beach House

Madhushree Kelkar Jan 13, 2019
It is important that you invest in the right beach house so that the property's cost will multiply over a period of time. Here are a few things to consider before making a purchase.
Many people like to exchange their vacation homes with those of others for a couple of stays. Step into others' shoes and think if they will like to stay in your beach home. If the answer is yes, then you are on the right track of making a buying decision. If you plan to buy a beach house, you must consider certain things before buying one.
Ensure that the house is not too old. As these houses face constant wear and tear due to salty air and heavy winds, you might spend a lot on repair. Remember if the house is near the ocean, the price will be high. If you can do with just a view of ocean, don't spend too much on a house with a shorefront. Don't spend on a beach house if you can't afford it.
Log on to the Internet to ensure that there is no big government project in the pipeline within the same area, as this will drop your real estate prices and even force you to sell the house at lower prices. Further is the valuable advice to you for buying a beach property.

Hire a Local Real Estate Agent

It is important that you hire a real estate agent who will have knowledge of the local area. He will be able to suggest the best properties which will be within your allocated budget.
He will know about the areas which are prone to high tides, storms, and floods and will ask you to avoid those areas. Through his contacts, you will also be able to negotiate a better price.

Scout for the Right Location

Don't just buy a house because it touted as 'hot' property by your real estate agent. Apart from considering whether the house faces the beach or not, you will also have to ensure that it is not located in a completely isolated area or one which is overcrowded.
Try to rent a property in the neighborhood and stay there for a few days to understand about the public transport, availability of medical help, supermarkets, electricity, etc. Just imagine what will happen if there is a medical emergency and no hospital within the vicinity.

Investigate the House

Speak to the neighbors to see what company you will get. Understand the history of area and house, it's safety and security from them.
If possible, check photographs of the coastline around the house, over a period of years. You can use the public library to get details of the area or google them. Do not forget to order a Comprehensive Loss Underwriting Exchange (C.L.U.E.) report from your insurance agent for a 5-year history of the home. You should get the natural hazard disclosure report.

Size of the Beach House

So you always dreamed of a grand beach house by the sea; however, given your budget, you are only able to afford a small one. Ensure that you get a house where you will be easily able to fit your family and other visitors.
See that the beach house comes with utilities like furnace, AC, solar panels, a proper sewage and drainage system, electricity, etc. If you do not have a budget for a bigger one, wait till you have gathered funds, or buy a decent beach house and furnish it with foldable furniture to save space.

Decide the Utility

An asset like a second home when not utilized for rent will become a liability as you will  have to pay insurance and other dues. Whenever you are not occupying the beach house, you must rent it out to other people who need a good place to stay during their vacation. This will help get some income, which can go as funds towards your loan repayment.

Professional Inspection

You would definitely not want to invest in a house which will be prone to problems due to high tides, sea storms, floods, etc.
You will like to stay in a house that will be safe for you and your family members. Hence, it is advisable that the house you intend to buy is surveyed by the geological surveyor or a local building and conservation agency. This inspection will tell you if the house is on a stable land or one that is just eroding away.
Ask the inspector to also check the plumbing and ventilation. Also, a beach-facing house will face more wear and tear because of the salty air, water and winds, problems to foundation and wood, and troubles such as rust, and molds. The inspector will let you know whether buying the house at that specific location will be a good decision or not.
The last thing you would want to do is buy a house in an area which is prone to storms and floods as they can make you shell out a lot of money on expensive repairs. Even if it is a new property, it is advisable that you do not skip the inspection process.

House Protection

Ideally, you should buy raised or elevated beach houses, especially those that are located on the shorefront. If you do not want to let go of a good house in a flood-prone area, you can raise it to avoid the water from affecting its exterior.
Ensure that your house is based on a foundation adhering to your zone requirement. Check it is above FEMA's Base Flood Elevation to avoid damage due to floods. You can check the flood profiles and the Flood Insurance Rate Maps (FIRMs). This will help determine the flood insurance you will have to take. Visit the FEMA website for more information.

Look Beyond What Meets the Eye

Check if your beach house is going to be part of a homeowner association or any community association. These associations look after the maintenance of common areas, beach access, etc. If you have a beachfront house, you may have to obey rules and regulations set by these association. You must also verify how financially and legally stable these bodies are.
The last thing is to have a house in an area where associations don't have enough funds for certain services that can raise your house value or get you a better resale bargain. Do online research on these associations before you decide to buy a beach house in their area. You can read the minutes of meetings on their website to know about their proceedings.

Maintenance

Don't think that once you buy the house, it will remain in good condition without any special care. You will have to undertake its maintenance from time to time. Otherwise, the salty ocean winds and harsh climate will deteriorate the paint, metal fittings, etc.

Know About the Total Costs

You'll have to pay the cost of house and the brokerage. This initial cost is only the tip of the iceberg. Remember that if you are not planning to stay there throughout the year or are going to lease it out, you will require to hire a property manager. Apart from this, regular maintenance will be necessary to keep the house in an inhabitable condition.
You will also have to spend on property taxes, insurance of the house, utilities, loan interest, etc. Hence, calculate the estimated costs for all these factors when you will consider the affordability quotient of the beach house. Undertake cost comparison in a particular area, and negotiate the rates before zeroing in on a single beach house.

Resale Value

Don't buy a beach house because you wanted an investment. Understand how it will fare as a long-term investment after certain years. The cost of the property should appreciate over a period of time and fetch you a good bargain once you decide to sell it. If this is not expected to happen in the area of your beach house, reconsider your buying decision.
If you are buying a beach house in partnership with a friend or family, decide the terms for distribution of the rental income. If you have pitched in 60% and your friend has expended 40%, know who will get a greater share in the rent. Try to buy a beach house in the US itself, instead of buying it in a different country.
Ensure that your beach home is within the driving distance from your residence. You will have to pay taxes on this house, so visit a tax consultant to know about your tax liability. Look at the history of the area to ensure that it is not prone to natural disasters. Also, it is important that you undertake a thorough due diligence before finalizing the deal.
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