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Many investors have been buying coastal homes recently. These investors are purchasing these coastal homes as either secondary homes or vacation rentals. Low market prices and foreclosures have provided flipping opportunities in the market, but there are few points you need to consider before you finalize your purchase.

All local tax assessors handle property taxes differently. If you hang on to a home for several years, you may be slammed with hike in property taxes. In these unstable economic times, many local tax assessors have chosen to either lower property taxes or freeze them for an undisclosed period of time. As the economy begins to rebound, the local tax assessor has the authority to reevaluate the milage on the property taxes and raise them. This will be based on local economies within different markets. A lot of hot real estate markets have seen property taxes escalate every a couple of years as a means of suppressing the demand in the area to control growth.

Whenever the home isn’t going to become your primary residence, you’ll probably be placed in a higher tax bracket for secondary homeowners. Secondary homeowners usually pay double what someone who is lives as a primary residence. Call your local tax assessors office and inquire about what the rates will be if the home was a primary or a secondary home. Also, keep in mind that after you renovations are complete on your coastal home the tax value will be reevaluated to determine what your new tax rate will be.

Many vacant coastal homes and foreclosures have been lacking maintenance. You should be able to negotiate a discount on the purchase of the home. Coastal homes have very strict zoning and building codes. It is recommended that you speak to some local building contractors who can guide you in your renovation efforts. If you have to replace the roof, you will probably be replacing more than just the roofing material. Some improvements to the framing such as roof straps may be needed to bring the home up to code. Replacing the windows and doors will probably require upgrades to windows and doors with high impact ratings which can easily cost more than anticipated.

When speaking to your building contractors for renovation estimates, a good idea would be to double the cost and double the time frame. There will likely be delays due to weather, material shipments, and other unforeseen problems that will affect both cost and repair time.

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.

Determine how long of a vacation season the area experiences. Areas like Florida will likely rent out year round, while coastal homes in Maine may only rent out from May to September. This will affect the amount of rental income the property will draw.

Closing Comments

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.