A Rental Beach House
Homes with an ocean view are generally beyond what some people believe they can afford; buying a beach house for rental income can create ownership, leveraged by rental income. You can enjoy use of the property on occasion, while at the same time generate income that can pay some or all of the mortgage, or even turn a profit. A second home as a rental property, may not have the same rate of return on investment as other income properties. Take this into consideration and balance it with long-term ownership, in a place you love to spend time.
Five Helpful Steps to Buying a Beach House for Rental Income:
1 Locate an area with desirable beachfront properties; focus on communities with other short term vacation rentals. Zoning and rental laws vary from state to state and from town to town, so research real estate magazines and listings, to get a general feel for the asking price of homes in the area.
2 Contact a real estate agent who is active in the area; Coastal communities have agents who specialize in beachfront properties and second homes. Have the agent send you lists of homes for sale, and keep you updated on new listings and market trends.
3 Research mortgage requirements for second home and income properties; A good loan officer can let you know the amount needed for down payment and closing costs. If you buy a property with a rental history and a past contract with a rental agency, you can count potential income to help qualify for the mortgage.
4 Contact a rental agency active in the area in which you wish to invest. View current properties the agency manages, and review the value of the homes for rent, against the daily and weekly rental rates. Ask the agency about expected vacancies and seasonal issues, as some areas have a strong, year-round rental market, while other areas only rent well during peak season.
5 Take all expected income into account, along with all expected expenses. Look beyond just your mortgage payments; Property tax can vary greatly from state to state. Take into account any anticipated repairs and normal maintenance needs; remember utilities must be paid, even during periods of vacancy. Rental agencies may have requirements, in order to be part of the rental pool; such as the addition of a hot tub, or cable television in multiple rooms. Rental homes must be outfitted for cooking and every-daily living.
Following these steps should help you make the right choices and decisions on your new rental property.