Economics of Buying a Beach House: Read Before You Buy (2024)

FAQs

Does it make sense to buy a beach house? ›

Yes, buying a beach house is a good idea — if you have the funds to purchase it, insure it, and maintain it. If it will be a vacation home, you'll need to ensure you can get there on a regular basis.

Generally, though, successful beach house vacation rentals could typically earn anywhere from $20,000 up to $50,000 in yearly rental income, although some could make less, and others, way more.

A beachfront condo has the potential to be an excellent long-term investment. Over the course of many years, you could easily earn several times what you paid for your investment. Not only that, but most owners of beachside real estate enjoy the added bonus of having a vacation home for their personal use.

Beach houses typically have higher price tags than you'd find inland, but the elevated rates don't end at the purchase price. The extra costs you'd expect to pay for a house anywhere, like maintenance, taxes and insurance, are often higher for a beachfront property.

Fall. According to a Trulia study, the best time to buy in coastal markets is in the early fall, particularly September and October. The reason for this is there are still a number of houses on the market, but also a lot less competition. Less competition will mean there is a better chance for negotiating a better deal ...

The National Association of Realtors (NAR) says the average age of vacation home buyers is 43, compared to 2003, when the average age was 61.

High Cost & Maintenance

Owning a beach house property comes with high costs and maintenance. Real estate costs are always higher for beach properties as compared to other locations. The interest on a mortgage will also be a premium due to demand for beach houses and its location.

There are also a few downsides to life at the beach. The weather may be unpredictable, pests might be an issue, and beachfront erosion could cause problems. Also, privacy can be hard to find, homes require quite a bit of maintenance, and humidity could lead to mold problems.

As a rule of thumb, it's cheaper to buy a house than to build one. Building a new home costs $34,000 more, on average, than purchasing an existing home.

So why is this famous beach community so affordable? Because the city has a dark side as well. The violent crime rate in Myrtle Beach is more than four times the national average, according to the most recent FBI data. That's brought home prices down.

Do vrbo owners make money? ›

Yes, listing your vacation home on Vrbo is a good way to make money. Not only is it one of the most popular vacation rental sites in the world (attracting 15.9 million visitors each month), Vrbo also cross posts its properties to fellow Expedia-owned sites.

One of the biggest risks involved in buying an oceanfront property is coastal erosion, which can lead to flooding. Make sure you are aware of the potential risks and have a plan in place for what you'll do if this happens. Another major risk factor when buying an oceanfront property is hurricanes.

Homes by the coast, such as in Santa Monica, endure intense sun, salty ocean air, and exposure to the elements. As a result, there will need to be rigorous upkeep on the home's exterior. In these situations, painting the house as often as every year yields the best results.

Selling season

Between May and July, many people search for homes to purchase, leading to an increase in demand. If you decide to sell your beach house during this season, you are guaranteed to get the highest price for your home.

Buying A House In The Fall

Outside of winter, a fall purchase can be ideal for cash-strapped home buyers. Once summer ends, sellers get more motivated. They usually lower their prices and provide an opportunity to get a deal. As is the case with winter, there's also less inventory during the fall.

Generally, home prices are lowest in January because demand is low, inventory is low and fewer buyers are looking for homes. While January might be the best month to get the lowest price on a home, you pick from a smaller selection of homes.

Thanks to the Equal Credit Opportunity Act, there is no age limit to taking out a mortgage. As long as you can meet the financial requirements, you're allowed to take out a loan at any time. To take out a mortgage over 60 you will need to be able to prove your ability to repay the loan.

While there are a lot of factors involved, the average age when people move out of their parent's home is somewhere between 24 and 27. This makes logical sense – it's after many people have completed college and around the time when most people get married and/or are in a long-term relationship.

Do beach houses get mold? ›

While the air conditioning system might help keep you comfortable on a hot, humid day, you still can't ignore the impact that humidity can have on the home. This includes how it can affect the indoor air quality. Indeed, mildew and mold are often common in waterfront properties.

People from across the globe choose to move or buy a second home here because of the abundant sunshine, diverse culture, and relaxed lifestyle. A beautiful California beach house can serve as a place for personal enjoyment and also generate additional revenue when not in use.

Cedar and concrete are both great alternatives as they are both resilient and water resistant while remaining aesthetically pleasing. All exterior trim and siding should be non-wood composite materials such as fiberglass and non-cellular PVC plastic which are more weather resistant.

The coast boosts your mental health

The results showed that people living close to the coast experience lower mental distress, but when the same people moved inland, the effects were reversed.

It Makes You Healthier

Outside of the obvious benefits, like being able to work on your tan whenever you want, the fresh air and vitamin D are great for your health. Studies also show that people who live near the beach are often less stressed and live happier lives!

Sea air, which contains iodine, salt, and magnesium, encourages respiratory health and can reduce the symptoms of asthma, promote respiratory health, improve allergies and skin problems, and stimulate the immune system.

Basic Supply and Demand

Waterfront homes are desirable to many people, meaning there is great demand for them. Although there is lots of water in the United States, there is not a lot of land on waterfronts on which to build. So with waterfront property, the supply is low. High demand plus low supply equals high cost.

Not only is a vacation home cheaper than a hotel when you break down the cost per person per bedroom, but you also have amenities that are private to the vacation home. Hotels are great for large groups that want to vacation together but also want some separation.

Murrells Inlet, South Carolina, Is the Top Affordable Beach Town to Retire In, According to Realtor.com. Several other Southern spots made the top 10.

Why do people retire in Myrtle Beach? ›

Many people choose to retire to Myrtle Beach for the low cost of living, warm coastal living and some of the best golf courses in the world.

“We also see a heavier percentage of people moving for cost of living compared to other states as well.” In its report, United Van Lines gave Myrtle Beach nods for its “mostly mild winters,” entertainment options and of course, its coastline.

A 5% commission fee is charged on the rental amount and any additional fees you charge the traveler (such as cleaning, pet, and boat fees). Bookings that originate from our expanded distribution partners may have higher fees.

Vacation rental owners should look to make no less than a 10% return on their investment. That means your income minus expenses (net operating costs including any mortgage payment) should be no less than 10% of your initial investment per year.

Vacation rental investment is a great way to get some passive income if you do in-depth market research and come prepared. A vacation rental property that can generate enough rental income to pay for itself is a good place to start if you are interested in real estate investing.

Condo pros

Less maintenance – If you own a house, all of the upkeep of the property falls on you. If you don't want to worry about maintenance as much, a condo might be a better fit. More perks – Unlike a house, many condo communities come with amenities like a pool or playground, and features like security systems.

Even though condos generally appreciate at a slower rate than single-family homes, they're still likely to increase in value over time. Some of the factors that can impact appreciation include: Location. Walkability.

Condos also provide a community life that single-family homes often don't provide, including shared spaces and amenities, events and more. It's a lot easier to take off and pursue travel or live seasonally in another area with the peace of mind of knowing that once you lock the door, everything will be taken care of.

Buying a beach house can bring an excellent return on investment, a reliable income stream, and access to a delightful vacation spot. Many beach house investors purchase homes that they subsequently rent out during peak tourism times.

In most cases, there is no difference between beachfront and oceanfront rooms. They often mean the same thing. However, some resorts may have oceanfront rooms that have views of the ocean but are not located close to the beach, while their beachfront rooms are directly on the sand.

Are coastal properties losing value? ›

The warnings are clear: the region faces a crash in coastal property values and a devastating economic fallout. According to First Street Foundation and Columbia University, Maine, New Hampshire, Massachusetts, and Rhode Island have lost $403 million in coastal property value.

Cedar shake roofs are used on Cape Cod style and beach homes. They can last from 20 to 35 years.

Homeowners with beach homes face a unique challenge when it comes to the maintenance and upkeep of these homes. Salt, water, wind, sand, and sun can all cause unusual wear and tear on the home. This all takes a specialized and tailored approach to cleaning and maintaining your home.

High Cost & Maintenance

Owning a beach house property comes with high costs and maintenance. Real estate costs are always higher for beach properties as compared to other locations. The interest on a mortgage will also be a premium due to demand for beach houses and its location.

There are also a few downsides to life at the beach. The weather may be unpredictable, pests might be an issue, and beachfront erosion could cause problems. Also, privacy can be hard to find, homes require quite a bit of maintenance, and humidity could lead to mold problems.

Buying a beach house can bring an excellent return on investment, a reliable income stream, and access to a delightful vacation spot. Many beach house investors purchase homes that they subsequently rent out during peak tourism times.

The proximity to the ocean can help moderate temperatures, making it a beneficial place to live year-round. The breezes that come in off the sea, often considered refreshing, bring in clean air, which can result in better health, especially for people who suffer with asthma and allergies.

The iodine, salt, and magnesium present in sea air can reduce the symptoms of asthma, promote respiratory health, improve allergies and skin problems, and stimulate the immune system. The energy to get moving. Seaside living promotes an active lifestyle.

Outside of the obvious benefits, like being able to work on your tan whenever you want, the fresh air and vitamin D are great for your health. Studies also show that people who live near the beach are often less stressed and live happier lives!