The sand, the surf, the sound of crashing waves—all available 24/7, right outside your door. Beach homes are the stuff of sun lovers’ dreams. Heck, even if you prefer the shade, a beach home can sound quite dreamy.
But all too often, people get swept away by the idea of owning oceanside property, then find out that owning one is no walk in the … sand.
For all the bliss, beachfront property comes with some potential problems that are wildly different from those of inland properties. Whether you’re planning to live in your beach home full time or you’re buying one as an investment property, there are some things you should know before you dive in. Avoid these all-too-common mistakes when buying a beach home.
1. Not sticking to a budget
“Oftentimes buyers get caught up in the glitz and glam of living on the beach, overextending their lines of credit and purchasing more house than they can actually afford,” says Evan Harris, co-founder and CEO of SD Equity Partners, in San Diego.
It’s not just the cost of the mortgage you have to consider, either. There are also the inevitable repairs and renovations that can come with owning any home, and particularly an oceanside property.
“Beach town properties are exposed to a constant bombardment of the elements, such as salty sea air and hurricane-force winds that properties in the mainland are not required to withstand,” Harris says.
He suggests that buyers look ahead and prepare financial outlooks for years 1, 5, and 10 of owning the property.
2. Counting on rental income to offset your costs
People often mortgage their primary residence to finance a beach home, assuming that renting out the latter will cover the mortgage payments, says Kay Walten, CEO/owner of Loco Gringo, a Houston-based company that specializes in real estate in Mexico’s Riviera Maya.
But those assumptions can land you in hot water. From hurricanes to dips in the economy and other unforeseen circumstances that affect the flow of renters, you can’t count on that income.
“We see people look at their dream place on the sand … and they’re confident they can keep it ‘full’ only to realize they can’t, leaving them short on funds when it comes time to make the mortgage payment,” Walten says.
Plus, don’t forget that any rental income you do have will be slashed by the cost of upkeep: electricity, water, garbage, taxes, local licenses to rent (required in some cases), property management fees, and maintenance.
“All of these items take dollars out of anyone’s nightly rental fee,” Walten says.
3. Forgetting about the neighbors
It’s easy to fall in love with beautiful beach vistas and forget about everything else, says Konnie Warburton, a real estate agent with Sereno Group in Santa Cruz, CA.
Before you buy, make sure you look beyond the stunning views and gorgeous house—as with any other home purchase, you should look into who your neighbors are and the zoning laws. Be sure to do your homework on the community. Is it a spring breaker’s paradise? A sleepy town for retirees? Will your kids have anyone to play with?
Take, for example, a couple Warburton recently helped to buy a beach home for their retirement. They were looking forward to meeting like-minded, beach-loving homeowners in a cohesive neighborhood. Instead, they’re one of only three permanent residents in their five-street enclave. At certain times of the year, their neighborhood is overrun by vacation renters; at other times, it’s deserted.
“Buyers need to research public records carefully,” Warburton says. “Also, finding out the culture of the beach location is so important.”
4. Not using a compass
We all know location is one of the most important aspects to consider when buying a home. And buying on the beach is kind of the “ultimate” location, isn’t it? But having a fabulous oceanside home doesn’t mean you have it made in the shade.
When you’re buying a coastal property, you also need to become something of a meteorologist. You need to know which way the wind blows. You need to know which way your home faces. And you need to know if your west-facing home is more prone to storm damage than a south-facing home.
Kathryn Bishop, a real estate agent with Keller Williams in Studio City, CA, relates the story of her friends from Detroit, who moved west and bought a condo in Malibu, CA, with a gorgeous view of the water, perfect for viewing sunsets—or so they thought.
“When the moving truck arrived, the first things unloaded was the outdoor furniture, which my friends quickly set up on the balcony, opened a good bottle of wine, and waited for their first view of the sunset,” Bishop recalls. “Then they found out that their condo did not face west, and they would never see a sunset from their balcony. Everyone assumes that the Pacific coast in Malibu faces west … not true.”
5. Skipping out on the proper insurance
The No. 1 mistake people make when buying a beach home is using it as a short-term vacation rental without the proper insurance, says Hans Tonjes, a broker with Living Room Realty, in Manzanita, OR.
In his market on the Oregon coast, about 25% of the homes have some kind of rental activity going on at least part of the year, and most homeowners insurance doesn’t cover that, Tonjes says. “It’s very important to speak with your agent about how you’re using the property so that any losses are covered,” he says
And, of course, there’s disaster insurance. You already know you’re going to pay a pretty penny on your homeowners insurance premiums. But depending on where you live, you might need to purchase homeowners insurance with supplemental hurricane coverage. And don’t forget about separate windstorm and flood policies. We know—it’s going to strain your wallet in a big way, especially with skyrocketing flood insurance premiums. But you’ll consider it money well-spent when disaster strikes.
6. Not using a coastal home inspector
We hope you’re using a local, licensed home inspector, or one who comes recommended by your real estate agent. But maybe you want to do a friend a solid, or you’re inclined to tap the inspector you worked with when you bought your first home.
Unless that inspector is an expert in coastal properties, resist the temptation. Otherwise, you could be setting yourself up for big problems down the road.
“Beach homes are subject to a very corrosive environment that presents unique issues,” Tonjes says. “An inspector from the city or out of the area might not necessarily be looking for these issues.”
For example, a coastal environment can completely break down galvanized joist hangers in decks and flashing on buildings, Tonjes says.
“A coat of paint can hide some of these liabilities, but a coastal inspector is going to be searching for the unseen but likely issues our salt air and wind-driven water and sand can present,” he says.
This isn’t to throw a wet blanket on your beach dreams. But the more prepared you are before diving in, the sweeter the sound of those waves will be.