Great Investment Opportunities In Coastal Homes PDF Print E-mail
Written by Hubert Miles   
Saturday, 26 June 2010 12:27
If you've recently bought a coastal home as an investment opportunity, you're not alone. Recent news reports state that many investors are purchasing coastal homes as a secondary investment or vacation rental due to the amount of foreclosures and low market prices. If you are thinking about flipping a coastal home, there are few points you should be mindful of that could reduce your profit on the home.
by HubertMiles


If you've recently bought a coastal home as an investment opportunity, you're not alone. Recent news reports state that many investors are purchasing coastal homes as a secondary investment or vacation rental due to the amount of foreclosures and low market prices. If you are thinking about flipping a coastal home, there are few points you should be mindful of that could reduce your profit on the home.

Local county governments all treat property taxes differently. If you hold the home for a couple of years, you may be hit with a rise in property taxes. In these tough financial times, many local governments opted to either reduce the property taxes or freeze them for a period of time. When the market begins to recover (and it will recover) the local government could reevaluate the amount of the property taxes and raise them. This will likely vary with different markets. Many red-hot real estate markets have experienced property taxes double every few years in the past as a way of curbing the demand in the area.

Whenever the home isn't going to become your primary residence, you'll probably be placed in a higher tax bracket for secondary homeowners. Secondary homeowners usually pay double what someone who is lives as a primary residence. Call your local tax assessors office and inquire about what the rates will be if the home was a primary or a secondary home. Also, keep in mind that after you renovations are complete on your coastal home the tax value will be reevaluated to determine what your new tax rate will be.

A lot of empty coastal homes and foreclosures have been lacking maintenance. You ought to be capable of negotiating a lower price on the purchase of the home to offset the work needed. Coastal homes have very rigorous zoning and building codes, so it's suggested that you talk to a few local building contractors who can lead you in your renovation attempts. Whenever you have to replace the roof, you'll in all probability have to replace more than just the roofing covering. A few upgrades to the framework such as roof straps may be required to bring the home up to code. Replacement windows and doors will likely call for upgrades to high impact wind rated windows and doors which can easily cost more than expected.

When speaking to your building contractors for renovation estimates, a good idea would be to double the cost and double the time frame. There will likely be delays due to weather, material shipments, and other unforeseen problems that will affect both cost and repair time.

When planning and forecasting rental income for your coastal home, you should speak to some local property management offices about what the local economy and what the daily, weekend, and weekly rental rates are for similar sized coastal homes. Be sure to ask about what the management fees are and what they include. Most services like housekeeping, maintenance inspections, and service calls are typically included.

When planning your rental revenue for your coastal home, it is important to determine the duration of the vacation season. Parts of the US such as Florida will likely rent out year round. While coastal homes in Maine might only rent out during the Spring and Summer months.

Closing Comments

If you are shopping for investment opportunities in coastal homes it is recommended that you begin by searching the internet. Online real estate marketing services and local real estate web sites provide listings, photos, and even video tours online. Once you find the property that fits your needs, you can then call or email the agent or seller with any questions you might have.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Hubert Miles is the founder of Waterfront Houses USA, an online marketing service that provides Coastal Homes and Coastal Homes For Sale available in the US and Canada.