Buying a Beach House: Your Ultimate Guide to Seaside Property

Dreaming of owning a beach house? Because this is a luxury, the rate of a beach house would always be higher than the properties in residential areas. Read this before you decide.
Buying a Beach House: Your Ultimate Guide to Seaside Property
If a country’s economy is doing really well in the past few years, there are chances that the real estate prices are high and that can reflect on the beach house prices as well.
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Who doesn’t like to buy a beach house and spend summers in front of an open sea and under the sunny sky? But yes, this vision comes with a price tag, and most of the time, it can be really expensive to achieve it. But the other side of this coin is that it can also turn out to be an investment. 

A lot of people buy beach houses in order to rent them during the vacation season. For example, Florida beach houses are mostly available for rent from November to April. But just because there is this advantage, you should not make up the decision blindly. To give you more information and clarity for buying a beach house here is the analysis that you need to consider.

Buying a beach house

When you are looking to buy a beach house, the timing you choose is the most important thing. If a country’s economy has been doing really well in the last few years, there are chances that real estate prices are high, which can also reflect on beach house prices. On the contrary, if the economy is not doing that great, you can find beach houses at a lower rate. You can take this added advantage and make an investment when there is a recession, so you get the best deal. 

Though you need to know that you will have to pay at least 20% of the amount in the down payment. So make sure that you save this amount before diving into buying a beach house. Also, the property that you are buying can also affect the rate, for example, whether you are buying an already owned property or it is a brand new property that will impact the price. One more thing that you need to consider is the crime rate in the neighborhood area because that also affects the rate of the beach house.

also know about : How to Buy a House on a Single Income

What is the cost of buying a beach house? 

Because this is a luxury, the rate of a beach house would always be higher than the properties in residential areas. For instance, if you are planning to buy a beach house in Florida the average house rate for the year 2020 amount was $229,158. In addition to that, the mortgage interest would also be higher on such luxurious property. And interest is the thing that matters the most when you are getting a mortgage. 

Let us understand that with an example. If you are buying a beach house with a mortgage of $1 million, you are supposed to pay the loan back in 30 years, and it has an interest charge of 4% then your monthly EMI would be $4,774. Now if we increase the interest rate from 4% to 5%, your monthly payment would be $5,368. That is a huge difference of $600. You will have to make sure that you have done proper research and are sure to get into buying this real estate property.

What about insurance? 

Just like the prices of a beach house, the homeowner’s insurance would also cost you more than the residential real estate properties. The main reason for this additional cost is that there is a higher probability of a flood and thus insurance is essential. On the east coast, the prices have been really high during recent years because of the threat of hurricanes. 

You can expect to pay $10,000 or more than that for your beach house to protect it against any flood in Florida. If you are planning to buy a beach house in other east coast states like North Carolina, you can get a good deal on insurance premiums. It all depends on which beachfront or area you are planning to buy a property in.

Bills to be taken care of 

Well, the hustle of buying a beach house doesn’t end with insurance and mortgages, it also includes the additional bills that you will have to pay such as utility and cable connection. Even these bills would be quite high for a beach house. 

If you are planning to use a beach house to rent and earn an income through that, you will also have to pay for advertising and marketing it to the audience. For that, you will have to hire people and that will increase your cost.

In addition to that, there will also be the cost of managing property which includes the lease agreements. collecting your rent. providing basic services such as refrigerators, air-conditioners, etc. You will also have to look after decorating your beach house, maintain it, and look after pest control; the list goes on. 

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The bottom line

To be honest it can be a lot to own and maintain a beach house and not everyone has the bandwidth to do so. It is possible if you are a full-time real estate investor, but if you are just wanting to buy a beach house for fun and thinking that it will give you some income, you need to get a reality check before you get into a deal. 

Lastly, if you are opting for a property manager or getting a broker to get deals for your beach house, it will increase your cost by 6%-12%. So make sure that you are aware of all the nitty-gritty of buying a beach house and then make an informed decision so you don’t have to worry later.

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Devanshee Dave

With over 4 years of experience in financial writing and a master’s degree in mass communication & journalism, Devanshee is currently preparing for her CFA (Chartered Financial Analyst) exams. In her spare time, she likes to dance and learn about cosmology, astronomy and anything that can expand her knowledge from the big bang to the big crunch.


This page is purely informational. Beem does not provide financial, legal or accounting advice. This article has been prepared for informational purposes only. It is not intended to provide financial, legal or accounting advice and should not be relied on for the same. Please consult your own financial, legal and accounting advisors before engaging in any transactions.

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