Well Decorated Homes

If you have purchased a coastal home lately as an investment opportunity, you are not by yourself. Many investors and homeowners state that they are purchasing coastal homes as a secondary home or vacation rental home. With all the foreclosures and the low market prices, many are considering flipping a coastal home to make a future profit. There are few things you ought to be aware of that could hold back your profit potential.

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.

If the home is not going to be your primary residence, you will likely pay a higher tax rates for secondary home owners. Secondary home owners generally pay about two times higher taxes than someone who is lives in the home year round. Ask your local tax office what both rates will be. Also, bear in mind that after you renovate the home the value will be reassessed, therefore the taxes and the insurance will be higher due to the increased value.

If you bought a coastal home that’s been vacant, foreclosed, or just lacking maintenance, you likely negotiated a discount with the hopes of renovating the home. Coastal homes have very stringent zoning and building codes. If you are not familiar with these rules, you may need to seek out the assistance of someone who can guide you in your efforts. Items such as windows and doors now require very high impact ratings. Impact windows and doors are very expensive and can easily cost more than anticipated. Replacing a roof many likely require more than just replacing the roofing material. Items like roof straps may need to be installed to bring the home up to current building codes.

While talking to your building contractors to obtain your renovation bids, a good idea would be to double both the estimate and the time table. At some point you can expect delays due to weather, material deliveries, and other out of the blue problems that will affect both price of the project and repair time table.

If you are planning on renting out your coastal home to vacationers, you should do your homework on the local economy. Call around to local property management offices to determine what similar homes are renting for on a daily, weekend, and weekly rate. Ask them about their management fees and what is included as part of their service. Services like housekeeping before and after tenants are usually included.

When forecasting your rental income for your coastal home, determining the length of the vacation season is important. Regions such as Florida and other southern states will likely rent out 9 to 12 months a year. Meanwhile coastal homes in Maine and other northern states may only rent out 5 to 6 months a year.

In Closing

Whenever you’re looking for investment opportunities in coastal homes it’s suggested that you start by browsing the internet. Internet real estate advertising services and local real estate internet sites offer listings, photographs, and even virtual tours online. When you discover the coastal home that meets your needs, you’ll be able to call or email the agent or seller with whatever questions you may have.

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.