Owning a beach house is not only a great idea for your vacations but also can be one of the most successful real estate investment strategies. However, not all the US beaches are equally good places to own a beach house. Read on to ensure that you know everything you need to know before you start searching for the best places to own a beach house.
What Do You Need to Know Before Looking for the Best Places to Own a Beach House?
The first question you have to ask yourself before checking the best places to own a beach house is why you are buying it in the first place. Is it intended to be merely a getaway from the noisiness and commitments of life or for renting it out on Airbnb or as traditional rentals? Or all of these purposes combined? Deciding on the main purpose of purchasing a beach house will enable you to find the best property for you and the best places to own a beach house. Do you know your actual costs? Keep in mind that in some coastal or vacation areas, beach house insurance runs up to three or four times as much as other inland properties or your primary home.
Are you thinking of owning a beach house and turning it into an Airbnb property? If yes, then you have to read “Four Things to Consider Before Purchasing an Airbnb Investment Property.”
Many beach houses are in flood-prone or hurricane-prone areas, so make sure to get an insurance quote before you purchase or bid. You also need to consult a tax expert to know all about tax deductions and tax benefits as taxes vary by state. On the other hand, if you are looking for the best places to own a beach house for the sake of renting it and making money, it is advisable to not be highly optimistic about the rental income and play it ultra safe by covering the beach house costs from your own funding and think of any rental income as a cherry on top in regard to the costs of purchasing a beach house. As a beach house owner, expect to face challenges such as the ins and outs of property management, unexpected costs related to owning a beach house, and many other challenges that you need to be aware of.
Beach House as a Real Estate Investment
Finding the best places to own a beach house as a real estate investment can deliver an excellent return on investment and a reliable cash flow, allowing you to make money. Many real estate investors who own a beach house in a high rental demand area and succeed in keeping their property occupied during busy seasons make a profit to cover expenses for the entire year. If you intend to use the beach house as an Airbnb rental, then you have to use an Airbnb profit calculator to estimate how lucrative the investment will be, its cash on cash return, and cap rate. It is also advisable to work with a local real estate agent to give you insider tips regarding available properties, location, and much more.
Do you want to know more about the Airbnb profit calculator? Read “The Guide to Using an Airbnb Profit Calculator.”
Best Places to Own a Beach House
Before finding the best places to own a beach house, it is important to understand what we mean by “the best places to own a beach house.” These places have to have good potential for real estate investors to generate positive cash flow whether through Airbnb or traditional rentals. Such places should also have beach houses that are affordable for both investors and tenants and also have a relatively high occupancy rate.
The sunshine state of Florida and its countless beaches make it the number one destination for Americans and foreigners alike to spend their vacations and holidays there. Thus, Florida is a great place to look for the best places to own a beach house. Pensacola city in Florida has a median house price of $145,700 as of 2018 and a median annual property tax of $1,109 and median monthly housing costs of $850. These characteristics do not only make it a great destination for vacation, but also a great place for real estate investors and Airbnb hosts to make money or own a beach house as a second home.
Fort Pierce, Florida
Although beach houses in Fort Pierce (5.4 median rooms per house) are slightly smaller compared to Pensacola (6.4 median rooms per house), it has great options for real estate investors to own a beach house. Its median home value is $89,100 and its median annual property tax is $902. As for median monthly housing costs, it is $777.
Long Beach, California
It is impossible to think of investing in beach houses without considering California as the California real estate market is very attractive for real estate investors. Long Beach city is one of the best places to own a beach house because it is a great opportunity for different real estate investment strategies such as Airbnb rentals and traditional rentals. Mashvisor’s investment property calculator indicates that Long Beach in regard to Airbnb investment has the following data:
Median Home Value: $693,228
Airbnb Rental Income: $1,794
Airbnb Occupancy Rate: 53.27%
Airbnb Cash on Cash Return: 1.12%
Airbnb Cap Rate: 1.12%.
Long Beach traditional rental market:
Median Property Price: $693,228
Traditional Rental Income: $3,237
Traditional Cash on Cash Return: 1.62%
Traditional Cap Rate: 1.62%
If you are interested in knowing more about the California housing market forecast 2018, read “California Housing Market 2018 Forecast – What’s the Deal?“
Gulfport is yet another affordable place to buy a beach house in. If you want to buy a house in this area, then you have to be able to afford a median house value of around $116,200 which is not bad at all considering having access to great weather year-round. Moreover, the median annual property tax in this state is $952 and the median monthly housing costs is $819, according to SmartAsset.
Port Arthur, Texas
Median home value in Port Arthur is $64,300 which means it is possible to afford a mortgage and get a beach house in this area. However, property taxes in this state are high compared to home values as the median annual property taxes reach $1,003 with $588 for median monthly housing costs. Thus, you should be aware of all the expenses that you need to cover in the long run.
Although investing in a beach house is one of the most lucrative real estate investments, it might not be the best investing option for beginner investors who look for constant profits and quick capital growth. However, if you are planning on owning a beach house to diversify your real estate portfolio or for personal uses, it is definitely worth the efforts.
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