Buying a beach house is a good investment?
Imagine you just got back from a much-needed summer vacation and you can’t get that beach house out of your head. You can’t stop thinking about how calm you felt and how great it would be to invest in a beach house.
Your mind begins to wander and you ask yourself, what would happen if you bought a vacation property? Or maybe you are wondering if buying a beach house is a good investment. Now is the time to stop dreaming about the idea and find out if it is the right alternative for you.
Next, we will help you list the key aspects that must be taken into account before buying this type of property
Buying a beach house: aspects to consider
There are many things to consider before buying a beach house, just like with any other great investment. In the following sections, we will discuss the factors that should influence your decision.
Consider the stage of life you are in
Are you starting a young family? How often do you travel? How much money, on average, do you spend on a family vacation? Have your children grown up and you want to provide a gathering place for everyone? Or do you want to invest in a beach house to have the possibility of renting it?
Considering where you are in your life will help you determine exactly why you want to buy this type of property and if the time is right.
Will you rent it out?
The decision to rent your vacation property or not will have a big impact on your expenses. Renting the home can also produce cash flow that helps offset the costs associated with ownership.
Actually, it is the best way to finance your purchase.
When looking for where to buy a vacation property, choose the location carefully. If you plan to rent it out when you’re not using it, it’s important to keep future tenants in mind. The rent should not only attract you, but also the tenants.
A good starting point is places you have already vacationed and are familiar with. Choose a beach house that is easy to get to and that attracts guests. Choosing a good location for a vacation home has the power to create a good or bad experience and investment.
Pay attention to the seasons of the year
When deciding where to buy a beach house, pay attention to the seasons of the year. If you are going to rent it, recognize the months of “high season” and when you can expect less demand.
For example, if you buy a property in a beach setting, the peak season will be during the warmer months. These peak seasons or high demand months should produce the most consistent rental income. Conversely, during “off seasons” your rental income will be less consistent and you will need to be prepared for lulls that occur throughout the year.
How will you maintain your vacation property? If your rental isn’t close enough to take care of it yourself, consider hiring a property management company. A tip from rental experts is to reserve at least 1% to 2% of the value of the house per year for maintenance and repair expenses.
Even if you are close enough to your property to take care of all the maintenance, ask yourself if you want to take on that responsibility. Especially in the case of an emergency, a property management company may be worth your while.
One of the biggest problems with a beach house is the issue of vacancy. Assuming you want to earn rental income when you’re not using the beach house, you need to figure out how to attract guests.
Before closing the deal, consider how you want to market your vacation rental home. Are you going to market the property yourself? If so, how? There are several vacation rental websites that you can advertise on. Decide whether you want to use websites like Airbnb, advertise on social media, or hire a real estate agent to take care of all the day-to-day details.
There are a number of marketing strategies that can help increase the likelihood of keeping your beach house busy. Again, depending on how much you want to manage on your own or not, a real estate agent can be a great option.
Advantages of owning a beach house for rent
The great advantage of buying a beach house to rent it is the income potential that you would obtain when investing in this type of property. Property rental websites like Airbnb have changed the way people spend their vacations.
Travelers stay in hotels much less than in the past, opting instead for the houses featured on these sites. The main reason is that you generally get more for your money. Rather than paying large amounts per night to stay in a hotel for a week, rental properties listed on Airbnb are often a better deal. Not only that, access to a whole house is attractive, especially if you have small children.
As with owning any real estate, you will most likely see an increase in equity or appreciation. Simply put, the value of real estate increases with inflation. Vacation rental homeowners should expect the value of their property to increase over time. In short, holding a rental property for the long term is a great investment strategy.
We hope that you can now determine what the benefits might be for you, as well as what things to keep in mind. We believe that the better question would be if buying a beach house is a good investment for you. At the end of the day, if you find a great property and the numbers make sense, it could be a great long-term investment.
It is advisable to seek advice from a real estate expert when buying a home, we are competent experts in all areas of the real estate sector with 30 years of real estate experience in the Marbella market.