Beach Houses as an Investment Property?

Discussion in 'Buying & Selling Real Estate' started by tspires2, Jun 17, 2014.

  1. tspires2

    tspires2 Member

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    Is it a good idea to purchase a beach house as an investment property? The values are higher but so is having the beach home maintained. The fact that I would be living at lease one state away would mean I would have to hire a company to lease the property as well as everything else that it may need...
     
  2. Kate

    Kate Senior Investor

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    Tricky question with two different answers for me. No idea whether it's a sound investment move or not, but on a personal level, I wouldn't buy a beach house for investment if it's in an area that's prone to hurricanes. I wouldn't want the heartache of losing it, or the headache of clean-up after those strong storms. It doesn't take a direct hit to flatten those beach properties... plus the insurance for storms and flooding would be a lot higher than other places.

    Now that said, I'm on the east coast of the U.S. and that's where the beaches are that I love so much. Beach property at a place where there *are* no hurricane threats would be a different story. I do know that they rent out for some rather hefty numbers, so remove the storm damage threat from a May/June to November hurricane season and I'd definitely consider.
     
  3. Kate

    Kate Senior Investor

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    I also forgot to say that location would matter, too... while you may be able to rent out a beach house year-round in Georgia or Florida, that wouldn't be the case for anywhere more northern than North Carolina. I don't think I'd rent a beach house on Martha's Vineyard in the middle of January (although I'm sure some people do!) :eek: Many beach towns all but close down after the season is over.
     
  4. crimsonghost747

    crimsonghost747 Senior Investor

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    I'd rather stick to normal apartments. Much lower starting cost (if you have a lot of money you can have multiple ones) and as long as you choose the area well you really should be looking at almost 100% occupancy, which can be tricky with beach houses.
     
  5. Leeroy_MY

    Leeroy_MY Well-Known Member

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    It is not a good idea for an investment property simply because the returns are unreliable. You will most likely have a hard time finding tenants who would be willing to rent it all year round.

    You'll also have to hand it over to a local tourist management company who will then rent it out to interested tourists on a weekly/daily basis. However, even though you would be able to charge a higher rental price to make up for those empty days, this income wouldn't be consistent.

    I would only buy a beach house if I were to use it myself as a vacation home. Furthermore, it is a known fact that sea levels are increasing each year and beaches are prone to heavy erosion which has led to parts of beaches (and in some cases, the entire beach) disappearing all over the world.

    For example:

    "Montauk, New York

    Jetties built 20 years ago to protect the beaches of posh East Hampton have prevented natural sand migration along this Atlantic coast summer resort -- leaving beachfront homes in neighboring Montauk virtually beachless, and vulnerable to the crashing waves of winter storms. Dwindling dunes from Sagaponack to Westhampton suggest the problem is widespread.


    Read more: http://www.frommers.com/slideshows/...ppearing-shorelines#slide838718#ixzz34ujiwTo5"

    You'll also have to pray hard that your property wouldn't be one of those beach houses left 'beachless' haha
     
    Last edited by a moderator: Jul 8, 2016
  6. Gavin

    Gavin Active Member

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    I've thought about this, not so much with beach houses, but like a lake condo or something. You could have a lot of traffic in the house, you could have a lot of loss or you could have a lot of gains! Especially if you rented it for like 1k a week or something. 52k a year if you never went down there yourself, but lets face it that's unrealistic.

    Point is, property and vacation property is a good investment if you're prepared to do what it takes to upkeep and market the property or find someone who specializes in that. I myself would feel okay doing it but the ultimate goal would be to get the mortgage on the property paid off and make pure cash. Get paid!
     
  7. tspires2

    tspires2 Member

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    I didn't really think of the heartache of the weather. We really wanted the idea of a beach house for our personal vacations and then as an added bonus have it as an investment property to kind of pay for itself if nothing else. I really didn't think of all of the extra foot traffic as well!!! Those are some things that I need to consider as well! Thanks a bunch for the thoughts!
     
  8. Muthoni

    Muthoni Guest

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    Personally I think it is a great investment to own a beach house, you can rent it out for that extra cash that comes in handy when you need to renovate. The most important factor to consider is the location of the beach house to ensure that it is in a conducive environment. Look at all the possible risks that can occur before buying the home.
     
  9. Peninha

    Peninha Senior Investor

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    Beach properties are dream properties for me, usually they are the most expensive ones because everyone wants to own one, but when the market contracts their price comes down a lot...
     
  10. jason

    jason Guest

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    I would consider it if it was in an area I'm familiar with and visit often. You would know more about the area, neighborhood, and risks. You'd also be able to use it if it was free. I would only suggest it if you have a personal interest, otherwise I'd go with regular real estate to invest in.
     

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