Investing in Waterfront Property

Written By Paul Benson

Posted October 14, 2014

More than ever, American buyers are scooping up second homes.

In fact, the most recent data suggests more than 50% of the top 1% of American homeowners — the group that drives our economy — plan on buying a second home in the next 12 months.

And the smartest ones will focus on waterfront properties.

Cha-Ching!lagunabeach

Why is living by the water so appealing?

Millions of Americans dream of someday owning waterfront property, not only for the incredible views, but for the lifestyle as well. Of course, what makes these properties so appealing can also make them incredibly expensive.

Nationwide, oceanfront or lakefront homes are worth more than double the value of similar homes located inland. In addition, waterfront properties retain their value more than non-waterfront, which is why so many investors gobble them up.

The most expensive waterfront properties can be found along the coastline of California. Laguna Beach tops the list, with the median waterfront home values at almost $10.1 million.

However, many of the most popular places for waterfront properties are located on the East Coast. Florida is the most prominent.

Beach properties have held up very well since the market tanked back in 2008, and many of those properties are getting top dollar now that second homebuyers are coming back strong.

However, there are still some affordable waterfront properties, recently covered by Zillow. These include:

  1. Englewood, Florida
  2. Downe Township, New Jersey
  3. Astor, Florida
  4. Crisfield, Maryland
  5. Fort Myers Beach, Florida
  6. Oak Hill, Florida
  7. Bonita Springs, Florida
  8. Deal Island, Maryland
  9. Hobe Sound, Florida
  10. Port Saleno, Florida

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Great Deals

So what should you look for if you want to enter this market?

It’s true that location is king. And having the “it” location can certainly create the comfort investors often require.

However, if your budget doesn’t allow for the absolute “perfect” location, not to worry. There are still some great deals to be had. Just make sure you focus on these four factors:

  1. Distance: Your property should be three hours or less from a major market. Data continually shows the ability to drive in for the weekend or a last-minute trip is important, and the three-hour rule applies for maximum desirability.

  2. Airport and Flight Accessibility: Many of you are buying this home so you can spend time with your family, so you need an airport with close proximity to allow this access.

  3. Family-friendly Community: Family activities are a must in the community. As mentioned above, many of these purchases will be used by extended family. The town you choose does not need to have the glitz of Laguna Beach, but it does need to have activities for the family such as trails for biking/hiking, beach access, golf courses, and restaurants.

  4. New Construction: This kind of activity shows desirability. Areas are either shrinking or growing. An area with attractiveness and an overall sustaining economy will show construction growth as well. New projects and new homes being built are a great sign of growth.

Once you have the right area, don’t be afraid to remodel. Businesses in these second-home areas are used to working with consumers from out of town. In fact, it’s quite common for this to be an easy process even if you’re nowhere near the property.

The opportunities to create value today can be strong, especially since new construction is booming. New inventory will shrink over the next two years, creating growth in resale, so you will be ahead of the curve if you’re looking to buy in the near future.

Until next time,

Paul Benson Signature

Paul Benson

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