Ah, the surf, sand, crashing waves -- and investment risks -- of buying a house on the water. Here's what you need to think about before putting your money down.
Over time, assuming climate change continues doing what scientists say it is doing, a lot of seaside property will be under water — figuratively or literally, as we reported yesterday. But let’s just say you still want to buy something within earshot of the surf. There are still better and worse choices. Here are five keys to getting the best investment in waterfront property you can.
1. Complete due diligence
Nikuwka / Shutterstock.com
You want to make sure your home will last at least as long as your mortgage, cautions Forbes. Most mortgages are for 30 years. Don’t just hope your home will still be standing and valuable by the time it’s paid off. Consult the state’s geological survey to make an informed decision, they suggest.
2. Is the house in a hurricane path or flood zone?
Tad Denson / Shutterstock.com
Before you buy a waterfront home, fully research the hurricane and flood probabilities and purchase appropriate insurance, recommends Forbes. As we’ve reported in the past, such insurance is expensive, so be sure to figure those expenses — and preventative measures you should take to protect your home — into the overall cost of the home.
3. Factor in continuous maintenance
bluedog studio / Shutterstock.com
Salt water and humidity wreaks havoc on siding, pipes, paint and other housing materials, reports U.S. News & World Report. Plan to constantly sand wood, invest in impact-rated glass and constantly maintain stainless steel and other materials. Add those costs into your oceanfront budget.
4. Plan to secure your property
Kawin Ounprasertsuk / Shutterstock.com
Burglaries, vandalism and even the theft of boats are major issues at waterfront homes, reports Bay Area Houston magazine. If you’re surprised, remember how many people treat oceanfront property as public.
“Many homes have inadequate security and fencing,” real estate agent Richard Schulman told U.S. News & World Report. “There is lots of opportunistic theft, because people make it so easy.”
Plan to invest in locks and security systems, he recommended. And think twice before you leave all of your windows open at night to enjoy the breeze.
5. Remember your private home is fairly public
ESB Professional / Shutterstock.com
Even if you buy waterfront property that has private land, you can’t stop people partying on boats in the water in front of your property and in some places — Hawaii is one locale that allows public access to beaches — even on your stretch of sand. “You might own a $4 million house and have people camping essentially in your front yard,” Schulman told U.S. News & World Report.
So should you buy a waterfront home? Experts recommend you think twice. And MoneyTalksNews founder Stacy Johnson cautions against buying any large home — waterfront or not — if you have to borrow heavily.
“I get it: If you have millions of dollars, you’ve got to put it somewhere, and where you live is as good a place as any,” he wrote.
“But if you’re borrowing heavily to impress your friends with a house that’s way bigger than you need or can afford, you’re not looking rich, you’re looking crazy.”
How much does climate change figure into your decisions about investments and purchases? Share with us in comments below or on our Facebook page.