waterfront-property
Waterfront Property

When to Consider a Waterfront Property as A Good Investment?

The sound of splashes, spectacular sunrises and gleaming sunsets offer peerless tranquillity to those who own a waterfront property.

Residing near waterfront locations is a dream for many. The exotic view and the cool breeze from the water can lure anyone. Yet, living in a waterfront home and dreaming for the same are two different things. Hence, wait before jumping to the conclusion of investing in a waterfront property.

You need to ask yourself a few questions and satiate those concerns. Some of the questions popping up in your mind would be:

  • Is a lake home a good investment?
  • What will be the benefits of waterfront investment properties?
  • Would a waterfront property be an ideal summer home?
  • How costly would maintaining a lake home be?

To answer these questions, we will squeeze out the pros and cons of buying a waterfront property.

Pros of waterfront investment properties

1. Valuable Investment

Waterfront properties are usually the most coveted properties. They prove to be a valuable investment in three ways:

  • Appreciation Rate:

Assume that you decide to sell your property in the future. You will get good resale value as a waterfront property rarely devalues. Waterfront properties are rare to come by. Thus, they need large upfront capital. Yet, the investment offers long-term appreciation compared to the city area properties.

  • Demand:

You can use the home for rental purposes too. Due to the unique location of the rental property and the high vacation rental occupancy rate, owners can charge relatively higher rental prices.

  • Saves Money:

You can use it as your vacation home. In this way, you save on your accommodation. Additionally, you can access water activities such as boating, kayaking, skiing, or swimming free of cost or with subsidized charges.

2. Health and wellbeing benefits

‘Stay healthy, stay wealthy’, is the motto of today’s generation. This motto influences people each day about:

  • The way they work
  • How they spend their holidays
  • The place they choose to stay

Research shows choosing to spend your holidays on a waterfront property is beneficial. It benefits your mental being as water has a calming effect. This further reduces your everyday stress.

Additionally, health-conscious families can enjoy nearby water sports and recreational activities during vacation. Else if they want to rent out or sell the property, a waterfront property ticks all the boxes for the patrons.

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Cons of owning a waterfront property

1. Expensive

Due to the exotic view, the majority of home buyers and investors look forward to owning a waterfront property. This leads to a surge in the prices of such homes.

Not just the buying cost but there are different types of property insurance costs too. Water insurance, general insurance, wind insurance, and other associated fees add to the cost list.

2. Inspect Carefully: Maintenance and insulation

A waterfront property, whether near a lake, ocean, or beach, requires a lot of maintenance compared to urban properties. Houses near water bodies are exposed to storms, mist, and salt air. This leads to mold growth, rust, corrosion, and wood rot. Besides, salt in the air causes damage to different sections of the property.

You need to get water quality tests or surveys done to recognize underlying problems. Thus, you need a lot of money for maintaining the property and upkeep. Moreover, you need to keep the home adequately insulated for further safety.

3. Climate Change Menace

Abstaining from natural calamities is not possible for any waterfront property. Owners will have to accept the fact that there is always a risk involved with the rising sea levels. Climate changes, severe storms may lead to floods. Water accumulation can cause excessive damage to the property further lowering its value.

4. Strict Directives

Before investing in a waterfront property, visit a local authority or hire an experienced real estate agent. They make you aware of what is allowed legally. For instance, you get to know if one can extend the size of the property or the number of recreational activities allowed in the area. Fail to do so and you may end up paying hefty fines.

5. Lack of Solitude (privacy)

During summers, there is a high influx of people near beaches. So, owning a beachfront home may lead to a lack of solitude.

Some people would think if this is the case, then “is a lakefront home a good investment?” As investors, you need to understand that the state or federal government usually owns the lake itself. So this makes the lake public land. Thus, not just the neighbors but there will be other recreational users too who would want to access the water. Additionally, at some lakes, activities such as jet skiing and sailing of certain types of boats are not allowed. Analyzing the facts ahead of time helps you limit your booking potentials.

Things to consider before investing in a waterfront property

Even if you get a high resale value, waterfront properties have a lot of considerations to mull over.

  • Location

Investing in waterfront properties depends a lot on the location too. Experienced agents help you spot the best locations for good real estate investment.

  • Flood Insurance

Investing in a property located near a water body needs different kinds of insurance too. Hence, you need to check on the details of flood insurances as well as loans before investing in a property.

  • Rental Strategy

Make sure to come up with a rental strategy before you buy a waterfront investment property. Reason being that few places have restrictions governing short-term rentals. Determine the following aspects:

  • Duration of rental

If you will be renting out on a long-term or short-term basis?

  • Distance between the two homes

In the event of an emergency, how quickly can you reach the new place?

  • Who will manage the rental property?

Will you do it yourself or will you hire a property manager?
Think, analyze and then decide!

  • Visit Frequently

Before making the buying decision, it is advisable to visit the place on weekdays as well as weekends at different times.

Wrapping Up

Talk to an experienced agent

Real estate agents like Pocono Real Estate, have extensive knowledge about the location. They can keep you with all factors of owning waterfront properties for sale. They are well informed about the outdoor activities permitted on the water. They can tell if the water is sandy, rocky, or muddy at the bottom. The agent should be able to tell you what insurances you need to take. In short, talk to an experienced agent before you finalize a perfect waterfront property to further add it to your property portfolio.