Before paying a premium for oceanfront property it's important to asses the extra hassles and expenses that come with such a desirable location. These key considerations can help buyers determine if the drawbacks outweigh the rewards.
Con: Property taxes
Homeowners can be certain that the taxes they pay on their waterfront property will be significantly higher than comparable non-waterfront homes. Zillow reported that the average price of a single-family waterfront home was more than double the national average. It makes sense that a coveted location will increase the appraised value of the property and subsequently hike up the taxes owners have to pay on it. Before purchasing a costly home on the coast, prospective buyers should consider whether they can afford the annual tax expenses that will come with it.
Con: Weathering and erosion
A house on the coast provides incredible views, but it also provides exposure to a lot of costly wear and tear. Salty ocean air can have massively corrosive effects on a home's facade. Consistent exposure may lead to a breakdown of concrete foundations and rotting of wood surfaces. Potential buyers should factor in the cost of coating and treating materials to prevent damage from salt air and harsh weather. In addition to weathering, waterfront property is at risk of devaluation due to rising sea levels.
Con: Flood insurance
With rising sea levels come rising insurance premiums. Home insurance often does not include water damage for properties in flood zones. This means waterfront homeowners need to purchase special flood insurance and should factor in this annual expense. The New York Times reported that rising premiums have given pause to many potential buyers.
Pro: Rental revenue
Many homeowners turn their waterfront property into an easy source of income by renting it out to vacationers or seasonal renters. Rental properties in popular vacation destinations can be a cash cow for owners, generating enough revenue to make the investment a smart one if they are not planning on living in their waterfront home all year round and are ready to take on the role of property manager.
Pro: Intangible benefits
Despite hefty concerns about the potential risks of coastal living, millions of people live happily by the water and enjoy countless unparalleled benefits. Waterfront residents appreciate the healthy lifestyle and access to activities like swimming, kayaking, water skiing and fishing. There is also a certain serenity that comes with waking up on the water that is difficult to replicate elsewhere. Homeowners often find that the joys of a coastal lifestyle outweigh the drawbacks. After all, it's tough to beat that view.
Buying a home on the coast can be a tricky decision; while the extra expenses can be quantified, most of the advantages are not measured in dollars but rather felt in emotions and quality of life. Prospective buyers should talk to local residents, real estate experts and financial advisors before deciding whether buying a home on the coast is right for them.