Owning A Beach House In Florida: Read Before You Buy



A beach house in Florida is the ultimate dream for many sun lovers. It’s a great vacation home and a source of passive income. But owning oceanside property has its risks, especially if it’s unplanned.

Beach houses are profitable real estate, but they are unique. Construction, maintenance, facilities, and renting are very different experiences. And the Florida real estate market has unique trends and features. So, before you rush into a purchase, consider the following information.

Florida Beach Houses Are Not Typical Real Estate

Beach houses are sturdier than your typical home and for good reason. The house has to weather salty gales, friction and collision from dust, and high temperature and humidity. It also needs to be built to withstand natural disasters.

Because of this reason, beach houses often have high purchase, maintenance, and insurance costs. In October 2022, the median purchasing cost of a beach house in Daytona Beach, Florida is $277777. The yearly premium on these beach houses 

Mortgage rates are higher for beach houses. In Florida, the rate is set at 6.71% in 2022, and it’s likely to increase. This will easily push your mortgage over $6000 per month on a $1,000,000 mortgage.

A beach house in Florida that is not your primary residence will have a significant increase in taxes. It’ll be considered an investment property if you rent it, and that’ll increase the tax even more. The profit from rent qualifies for capital gains taxes, and you may have to give 25% of the rent money away.

If you’re renting out, then you have to pay for marketing and hire a property manager. The cost of marketing is fewer thanks to online marketing. But you’ll still spend $300 or more on the manager and ads.

The housing market in Florida isn’t very kind to buyers in 2022. Since 2018, there’s been an astronomical increase in housing prices. House prices in Florida have increased by 24% in January 2021 and then reached 32% in August. Some beach houses have experienced a staggering 56.8% increase.

The costs for a beach house may seem exorbitant and convoluted. However, the advantages of owning a beach house can outweigh these issues quite easily.

Advantages Of A Beach House

The biggest advantage to owning a beach house is the rent. In Florida, a 2-bed beach house can generate over $2300 per month. If it is well-furnished and luxurious, even a single-bed beach house will fetch $2000 or more per month easily.

For a $400,000 beach house, with an $80,000 down payment, a Florida mortgage rate, and a 740-850 FICA score, a 15-year loan term will cost you $2,832 per month. You can rent that same beach house for over $3500 per month for each tenant if you picked the right property. You can easily pay off your mortgage year-round with only seasonal bookings.

The other benefit is that the beach house is yours to use during the off-peak season. You can enjoy the beach, the sea, and the sun however you like. You don’t have to worry about exorbitant rent rates, or not liking the décor anymore.

8 Tips For Purchasing A Beach House In Florida

You can completely negate all costs of a beach house, and make great ROI with only seasonal renting. Here are 8 things you can do to ensure you never pay a cent out of your pocket.

 – The Right House. Check financial and value history for consistent positive results. Check if the house is too exposed to the elements and if it’s lacking a great view. You want to see the sunrise and sunset from a good vantage point.
 – The Right Neighborhood. For an inexpensive beach house, pick a vacationer and tourist-packed area. For luxury beach houses, choose quiet, private neighbors.
 – b. The beach house market is already slowing down, and you can shave off $10,000-$50,000 easily.
 – Make A Large Down Payment. There’s no way to reduce or cut down payment for a beach house, so cut the loan down instead.
 – Don’t Pay For It. Make use of financial leverage, and avoid paying from your savings.
 – Rent Using Agents. For renting, use online agencies that’ll give you season-wide renters. You’ll find renters looking for luxury beach houses and willing to pay.
 – Avoid Airbnb. You’ll have to settle for cheaper rent, inconsistent schedules, and frequent cleanups.
 – Renovate In Stages. Don’t rush to modify the house. Use the profits instead of dumping more capital in, and causing more debt. Make surface changes to make the house feel warm and inviting first.

It’s natural to think that the process is dizzying and complex. To help, here’s a list of Daytona beach houses you can check out. You’ll find great beach houses of all price ranges here, with all variations of décor and amenities to pick from.

Beach houses can seem like a luxury due to inflation, and buying one is headache-inducing. But the best time to buy real estate is when the market is overwhelmed, and the best way is to handle it yourself. Do your research, and go as slow as you need to. Being methodical will increase your odds of finding the dream beach house.

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