Thinking about buying a beach house? Beach houses are great – they give you a great place to vacation and allow you to make extra income from rentals, but there are a few things to keep in mind before you sign on the dotted line.
Before You Buy a Beach House, Consider the Costs
You incur additional costs anytime you buy a home. For example, you will need to put aside some money every month to cover future issues such as a leaky toilet or broken air conditioner. You’ll want to decorate the home, so you will likely spend a bit of money on things like furniture and decor.
When you buy a beach house, there are other costs to consider. For example, are you planning on renting out the home for a few months each year? You’ll probably want to hire a property manager to help you stay on top of everything. You may also end up paying fees to market the property, especially if it’s on a site like airbnb.
Something else to think about is insurance. Home insurance tends to be higher for a beach house compared to one a few miles inland. Being at sea-level very close to the ocean causes additional risks for flooding etc.
A third cost to think about is a higher interest rate. Right now, interest rates are very low. However, they will still be higher for a rental property than a primary residence and costs tend to add up over time. For example, say you mortgage $300,000. At an interest rate of 3.5%, your monthly payment is about $1,347. At 4.5%, it jumps to $1,520. Not a huge jump, but over 30 years it comes out to $62,280 more money paid!
The Second Thing to Consider Before Buying a Beach House
Something else to think about is how often you’ll really get to enjoy the beach house. Do you have a few kids who are involved in a lot of extracurricular activities? When things are “normal” without a virus going around, are you traveling a lot for work on Sundays?
These types of things can put a damper in your plan to hit up the beach house every other weekend. It’s fun to have that second home, but be realistic about how much you’ll really be able to enjoy it.
Think About Your Neighbors When Buying a Beach House
Are you comfortable being in a popular area where you will likely have loud tourists during the summer? If not, make sure you do some research on the neighborhood you are buying in. If you’re interested in something a little more family friendly and quiet, this is especially important. A great real estate agent with local expertise can help you find the perfect neighborhood for your specific needs.