The thought of owning a home on the beach is a dream come true to many.
The thought of looking out of your windows and seeing the sparkling ocean and hearing the crashing waves speaks delight to many a heart.
Maybe making some extra income from renting it is appealing, along with the idea of always having somewhere to stay for your own vacations.
Then reality sinks in.
There’s much more to think about than you may realize at first.
As with anything, there are pros and cons to owning a beach rental.
Let’s start with the positives.
- Most people wouldn’t buy a home, rental or other, that they didn’t derive some pleasure from, so this pro seems like a no-brainer. But the fact is, having a place of your own that you can visit whenever you’d like, in a location you love, is a deeply satisfying. They own a beach home because they enjoy life at the beach!
- Whether you’re spending time in the home with your own family or you’re able to open it up to some friends, owning a home at a location like the beach can give you an opportunity to build relationships that you may not have had otherwise. It can also allow you to gift a stay at your home-away-from-home to a friend or family member who needs it.
- It’s an investment. Though the market can swing wildly, a well-maintained home on the beach will most likely appreciate over the years. For example, over the last several years, Outer Banks oceanfront homes have been steadily appreciating. While the reason that most people purchase a home on the beach isn’t to get rich quick, it’s encouraging to know that you own something that is growing in value.
- Renting offsets the cost. While a beachfront rental certainly isn’t the way to gain a large cash-flow, renting it out will definitely offset some of your expenses.
- Provides a tax write-off. Even though you aren’t making large profits, your beachfront rental is still considered a business, meaning you can write off expenses that are associated with the running and upkeep of it.
Unfortunately, owning beach property isn’t all sunshine and beach walks.
- The cost. Plan on the costs associated with your beach home being more than you anticipate. On top of property management fees, mortgage payments, utilities, insurance, and taxes, there are always unplanned maintenance fees. Things break unexpectedly. Even if it’s a seemingly small thing, it must be fixed. You can’t let repairs go in a home that you’re charging other people to stay in! It’s unlikely that the income from renters will cover all of the expenses.
- Risky business. Most beach locations carry with them the threat of a major weather disaster occurring at some point. Hurricanes and flooding can all cause massive damage to your home. There’s also the risk of allowing strangers to come into your home. Liability issues can arise when people are coming and going from week to week. Of course, there’s also the financial risk associated with the fickle housing market.
Special memories can be made with friends and loved ones when you own a home on the beach.
You have to weigh the pros and cons and decide if those good things are enough!