Is Renting Out a Beach Home a Good Investment?
Are you thinking about investing in a vacation home near Wilmington? Is it even a good investment? While the thought of waking up to the smell of the salty air and the sounds of the rushing waves may sound like a brilliant idea in theory, there are a lot of tips to know before taking such a big life step.
1. Choose your Location Wisely
When investing in a vacation home, do your research when you’re shopping. Vacation homes are meant to be just that—vacation homes. And if you are purchasing one, there’s a chance that you don’t actually live in the area that you’d like to purchase in, so when you choose, you should know exactly why this home is the one that you want to purchase. What do you like about it? Is it going to meet all of your desires?
2. Rent Before You Purchase
Why should you rent a beach home before you purchase it? Well, simply put, you want to be sure this investment is a good fit for you in all aspects. In order to be sure that it’s the right fit, one visit won’t do the trick. You may want to check into not only the property, whether it’s a beach house or a condo, but the surrounding aspects as well—restaurants, entertainment, and the overall environment of the home you are purchasing. Is it crowded during the summer season? Do you hate crowds and dealing with tourists? You may want to find a home that’s a little further from all the craziness.
3. Choose a Budget and then Buy Under It
The goal here is to eliminate stress as much as possible. It’s a vacation home after all; while there are important factors that you have to consider when investing, a vacation home is supposed to help you relax, not cause more problems for you. Buying under budget will help alleviate some of the worries of the monthly payments and extra costs, but it will also actually give you some room for the extra costs that come with managing a property, whether you manage it yourself or hire a property management company. If you’re looking for homes with a Bargain, check out our page on Beach Front Properties that come at a steal, or look at Beach Homes for Sale Under 500K!
4. Consider other Finance Options
Did you know that you can buy Real Estate Investments inside of your Retirement Account? If you are looking to leverage your IRA this might be a good option. Plus you don’t need all the money to buy the property. There are great finance options that allow a non-recourse loan inside of your IRA. SO your IRA makes the monthly payment. Also another option is you can be a part owner with your IRA. For example you can own it 50% in your IRA and 50% with a friend. We help clients all the time with purchasing investments with their IRA. Click here to read more about How to Buy a House with your IRA.
5. Make Sure the House and the Location are a Good Rental
If you’re looking to turn your vacation house into a rental property and make the most of the investment, you’ll want to also make sure that you’re not the only one who likes it. Being able to rent out your property easily will also alleviate some of the financial stress that comes with being a property owner. Down the road, if you’d like to upgrade, that is always an option.
6. Calculate all the Costs
After you’ve calculated how much you will be paying for the second home’s mortgage, go back and check out all the extra expenses of the house, such as taxes, insurance, maintenance, and utilities. These are what you will at the very least be paying for in addition to the mortgage. If you are living more than an hour away from your property, then you may want to highly consider hiring someone else to take care of the property for you. Beyond all of these costs, then you have to take it even one step further and think about hiring a cleaning company to take care of the property between renters and ensure each renter comes into a sparkly clean vacation home to enjoy during their stay. These are all just the basics of the costs that are associated with buying a beach rental property.
7. Work with a Real Estate Agent Who Knows the Area
We can’t say this enough. Whenever you are choosing to invest in a new home—whether it is going to be your primary residence or a vacation home that you want to convert into your safe haven for rainy days—you always want to hire the best of the best to ensure that you get what you are looking for. Knowledgeable real estate agents know the market, the best locations, the worst locations, and can tell you the ins and outs of all the tiniest details. Click here to learn more about how to pick the best Real Estate Agent.
We Can Help!
Are you looking for the best Real Estate Agency in Wilmington, NC? When choosing a Real Estate Agent, be sure to go with someone who has expert knowledge of listings and selling a property. The Regina Drury Real Estate Group has that and more. We are a Full-Time Real Estate company in Wilmington, NC; our crew can provide you with all of our expert knowledge and focus on maintaining a high degree of customer service that will leave a lasting impression. Contact us today to talk more about your Wilmington, NC Real Estate needs.