It seems more and more people want to own property at the beach these days. There’s just something soothing about being near the ocean. For some, it’s a status symbol, but for others, it’s simply a beautiful place to spend time.
Regardless of your motivations, there are drawbacks to beach house ownership that you should carefully consider before making such a purchase. Some are pretty self-explanatory, but some require further investigation.
In this post, I’ll break down a few of the most common drawbacks worth paying attention to if you’re thinking about beachfront or coastal property.
1. High price of homeownership
For starters, beach houses are expensive. Considering the shift to remote work, prices have skyrocketed as of late. In 2021, for example, the median home price in Palm Beach, Florida sold for nearly 8 million dollars — a 45 percent year over year increase.
Anywhere in the world, you’ll be paying a premium for being near the water. How much more varies from place to place, but it’s always significantly more. Dubai, Perth, and Sydney have some of the highest premiums.
Knight Frank Global Waterfront Monitor compiled costs from its global network and found that waterfront property prices average 46% higher than the prices of homes without access to or views of the water.
Or…it could be even more. A report from Ross Milroy showed that Miami luxury condos with ocean views went for 38% to over 100% more than those without views.
The bottom line is that if you are looking into oceanfront or coastal property…be patient. Markets tend to self-correct with time.
While it’s nice to say you have oceanfront property, there are risks associated with being on the water (I’ll touch on in a minute). If you love the beach and don’t mind walking a couple of blocks to the ocean, you can definitely save money being off the shoreline.
It really comes down to your budget and what you value: Being near the beach in general, or having an ocean view?
2. High taxes
As a result of the higher purchase price, property taxes will also higher. That goes without saying.
But there are other potential tax consequences for beach house purchasers due to the recent tax law changes.
Tip: If you want to tap a home equity line of credit for some of the funds for your purchase, as many buyers do, you cannot deduct the interest expense from your taxable income.
To realize some tax advantages, you could use the beach property as a rental property as well as enjoy it yourself. However, there is a lot of attention to detail involved to get the tax benefits, and if you sell it within the business structure, your capital gains taxes could be higher.
3. High insurance costs
One thing to note is that the federal government has heavily subsidized flood insurance costs historically. However, the current administration is reducing those subsidies.
As a result, expect to pay more for insurance, disproportionately for larger homes.
According to the New York Times, the cost is expected to eventually increase more than tenfold in some parts of Florida.
The article went on to explain that a real estate agent in Tampa currently paying $480 per year in insurance has been informed that costs could rise to over $7,o00 according to her insurance agent.
In addition to flood insurance, your homeowner’s insurance policy may or may not cover property damage from hurricanes other than flood damage. As always, make sure you understand your coverage and speak with an agent beforehand.
4. Storm and flooding risk
Depending on where you live, flooding and hurricane risks can pose a threat as well. Powerful winds can tear off roofs or rip structures apart, especially older homes. Newer houses can better withstand hurricanes, but you’ll pay for it upfront.
Another drawback for many people is the fear of having to board up windows to protect them against wind-driven objects occasionally.
Fallen trees and power lines may restrict your travel during and after storms, and losing power for a few days…it’s just part of living in many beach communities.
Flooding may be more likely to occur than wind-driven structural damage in some areas, and it can be even more destructive.
If you simply want to avoid this reality but still be ‘near the coast’ looking for homes a little further inland may be a good option.
If your beach house is on a sandy beach, you will have a sandy home! Sand will manage to find its way everywhere.
It’s impossible to keep it out unless you avoid the beach completely—and even then, the wind is not your friend.
If your house doesn’t already have an outside shower, you may want to consider adding one to cut down on clogged shower drains.
6. Saltwater corrosion
Considering saltwater is very corrosive you’ll have to live with what it does to your house and possessions.
The wind and waves create a fine salty mist that gets into everything and corrodes many metal components. Even galvanized steel eventually corrodes!
Check out a post I wrote, 8 Effects Living Near Salt Water Has on Your Home and Body for a bit more on this phenomenon. You may be surprised at a couple of these!
It’s also not a bad idea to have lubricants like WD-40 handy. This miracle fluid comes in a spray can and can be applied to all metal components that might rust, and it does an excellent job of protecting them.
It can help keep those sliding doors, windows, and everything else operating smoothly that will be exposed to salt air.
Another thing to be mindful of is the effect salt has on electronics. If you like to work outside on your laptop as I do, you may find that these devices age a bit more quickly. Salt and electronics obviously don’t mix!
7. Noise and people
Beaches attract people, and they can be noisy on the beach during the summer season.
One thing to know is most beaches have a fair amount of public access areas (unless you live in areas like Malibu).
So while you may own a fair bit of land behind your beach home, the beach itself may not be the serene paradise you’re dreaming about. At least not in the summer months!
Tourists and guests
Because not everyone understands or respects your property—you may have people parking on your property, blocking your driveway, or cutting across your property to get to the beach.
That could be annoying, and not uncommon during the busy season. On top of that, your friends and relatives may want to visit, which may or may not be welcome.
You may just discover a few relatives you never knew existed once you own a beach home!
8. Maintenance and renovation costs
When buying a house, you should always have a property inspection. You want an inspector who has lots of experience with beach houses and their problems, so you’ll know what repairs to expect on the major systems.
Outside of upfront maintenance after purchasing a home, beach homes require a lot of ongoing maintenance to keep everything in working order. The humidity and salty air simply ages many components faster than a home further inland.
You may need to renovate sooner than you think due to the accelerated wear and tear of the beach environment, even if you keep up with the maintenance requirements.
9. The cost of property managers and renting it out
If you plan to rent out your beach house during part of the year, you’ll probably want to engage an experienced property manager. The right person can arrange the rental agreements and maintain the property while others occupy it.
However, a good property manager can be hard to find and may be expensive. Expect to pay 15% to 25% of the rental income to the manager.
It’s also important to understand that earning passive income from a beach home isn’t quite as lucrative as some people expect it will be.
Once maintenance costs, property managers, competition, and seasonality are factored in, you may find it to be too much of a hassle.
One last note
Hopefully, you now have a few things to think about before making a decision. While owning property at the coast isn’t for everyone, it still remains a pretty good investment option over time.
Don’t let the potential drawbacks discussed here discourage you from buying a delightful beach home for yourself if you decide to move forward. Just make sure what you know what you’re getting into.
If you suspect lake life might be a better alternative, go check out my post, Lake House vs Beach House: A Homeowners Experience for my firsthand experience in this area. Good luck!