Are you considering buying a second home near the beach? Do you plan on renting it out for extra revenue when you're not staying in the home? Buying a rental property near the beach can be a great way to make extra money and secure a permanent vacation spot for your family. If your property is in demand, you may even make enough in rental revenue to fully cover the costs associated with the house, meaning you can essentially vacation there for free. However, you should do your research before you commit to a property. If you select the wrong property, you may find that rental demand is lower than you expected or that costs are much higher. Here are three things to consider before you purchase:
Examine all the costs involved. Home ownership of any kind comes with a whole host of costs other than the mortgage payment. You'll also have taxes and insurance. But with a rental beach property, you could have a lot of other costs, too. For example, you'll likely need a management company to handle the rental aspect and all of the bookings. You'll probably need a cleaning service to take care of the house in between renters. You also may need a maintenance crew, sheet and linen laundering service, pool maintenance, and even advertising services to attract renters..
Additionally, your insurance on the beach home may be different than the insurance you have on your current home. You'll likely need insurance against renter damage, plus hurricane and flood insurance. Make sure you calculate all of these costs ahead of time so you can calculate accurate income projections.
Look at rental demand in all seasons. You'll probably have no problem renting your home during the warmer, prime vacation months. That's especially true if you're in a popular vacation town. But what about the winter months? Will you get a lot of renters in the off-season? Or will the house sit empty? Also, look at off-season pricing at surrounding properties. Do those properties drop their pricing significantly in the off-season? If so, that's a good sign that demand drops in those months. If demand is soft in the winter, consider whether you can afford the home during those months without rent coming in.
Work with a local real estate agent. If you're from out of town, it can be hard to determine exactly where in town is the right place to buy. You want your home to be in the most popular destination spot so you have a high level of renter demand. A local agent can help you navigate all of the locations in town and help you find the right place for your budget. For example, the agent will likely know which areas are most popular for renters. The agent may also be able to recommend locations that are a steal right now, but are up-and-coming. If you're looking at condos or homes in gated communities, your agent can tell you which developments are in demand and which ones you should stay away from.
For more information, contact a real estate agent like Claudia B Ramirez. They can help you find the right home for your budget.Share
17 November 2015
After I decided to buy a new home, I realized that I probably needed to prioritize the things on my wish list. Since I am not wealthy, I realized that I probably couldn't get everything that I wanted out of a single home--at least, not this time around. Fortunately, I worked with an incredible real estate agent who helped me to figure out which type of property would pay off in the end. Finding a home took a lot of time, but I am really pleased that I found the right one. This blog is all about learning to prioritize your home hunting wish list so that you can have the home and financial situation of your dreams.