HOW TO BUY A BEACH HOUSE
by John Thompson
 So you want to buy a beach house! A few
questions are in order, and then you can get started!
Is this for investment, pleasure, or a
combination of the two? For investment...leave the emotions
at
home, and focus on the numbers. For pleasure, you're allowed
to let your emotions roam...but don't forget
the associated costs!!
Which part of the beach is your
preference? Look at the map to the left and begin to get a
feel for the area. There are miles and miles of beach, but
everyone seems to have a personal desire to be on one
stretch. For ease, I group them from north to south as
Carova/Corolla, Duck, Southern Shores, Currituck Mainland,
Kitty Hawk, Colington, Kill Devil Hills, Nags Head, Manteo,
Dare County Mainland, and Hatteras Island. Tell your
Windswept Realtor your preference, or ask us for a map. Or
ask us to show you the area.
Do you want waterfront? Ocean or sound?
Not only does the price increase as you get closer to the
water, but also the rental income. You just want to be sure
that the relationship is correct between price and value.
That's where having an experienced Realtor, like Windswept
Properties can help. Windswept knows the erosion rates, the
elevations, etc., to help you make the best decision.
Generally, those properties on the Oceanfront, Oceanside,
and Between the Highways are better seasonal rental property
investments, while those on the Westside of the highways
tend to be lower priced, wooded, and better for year-round
living.
Lot Purchases are always a good
investment, particularly if you are not ready to build, or
don't have the necessary funds to do so. In this case, very
reasonable financing is available(5%) for lot loans, and
assuming a fair appreciation rate, the lot's value may
increase in value during a couple of years, providing the
necessary equity to build at a later date without additional
funds. By buying just the unimproved land, you can "capture"
that piece of property that will reserve your beach view for
future years at today's prices. As we all know, they are
just not making any more land these days....particularly at
the beach!
OK, so you've decided to buy an existing
home, and want to understand the process as it relates to
Pricing, Financing, Realtors, etc. Realtors can be selected
from a number of outstanding firms, but be sure you are
comfortable with the Realtor's understanding of the market,
negotiation skills, and above all....do you get along. This
will be a process where you are likely to be in another part
of town or another part of the country, and you will be
depending on this individual and the firm to represent your
interests. Choose how you want to be represented. For an
explanation of Agency, refer to The
NCREC, where a complete description of the information
is available. Or, write and we will send you the brochure
which explains everything. Choosing Windswept will ensure
you are shown all available listings of all types of
properties on the Outer Banks, not just our listings. As an
independently owned Brokerage, Windswept has access to the
Multiple Listing Service which lists all properties for
sale. Even if a property is not listed, Windswept will find
out your needs and solicit property owners to consider the
sale of their property. Working as your Exclusive Buyer's
Agent, it costs you nothing.
Typical Financing is either Conventional
Fixed, Adjustable, or Owner Financed. Most of our friends in
the financial institutions can tailor a plan to meet all of
your needs. Typical Qualification is based on taking your
gross monthly income x 28% to determine the maximum monthly
payment. Also, your gross monthly income x 36% is the
maximum your total payments for mortgages, cars, credit
cards, etc. As an example, let's say you are currently
making a gross income of $5000/month. Let's also say that
you owe car payments of $600/month and various credit card
expenses of $250/month. How much can you afford to spend on
a home? Using the above formula, your total monthly note
could not exceed $1400, and your total monthly indebtedness
could not exceed $1800. That should enable you to purchase a
home for $150,000, put 5% down($7500) and finance the
balance @ 7%, with monthly payments of $948.00. This example
does not take into consideration the actual before & after
tax advantages of a rental property, which, depending on the
income generated could bring the total annual out-of-pocket
costs of ownership to less than $3000.00. How's that for
your own place at the
beach!
Typical Sources of Downpayments include:
Savings, Partnerships, Relatives, Equity Credit line on your
primary residence, etc. Using a 1031 Exchange is another
source of funds for those buyers who have a lot of equity in
another similar type property. Windswept can direct you to
the professionals who know how to handle these creative
approaches.
Property Management is a big business on
the Outer Banks. With so many firms specializing in it, it's
no wonder it is so competitive. At Windswept, we have no
conflicts whatsoever. In other words, we are not involved in
the seasonal property management business, and can therefore
provide you with sound advice on who does it best. Not all
property management firms are alike. The ownership of
Windswept has been personally involved as a property owner
for over 20 years, and with that experience, can guide you
to the right decision.
An Investment Analysis should be done on
all property purchases, prior to the making of an actual
offer. In so doing we can show you just what this property
will cost or generate on a monthly or yearly before and
after-tax basis. Ask the pros at Windswept to send one to
you on any property for sale on the Outer Banks. It will
certainly take the guesswork out of the purchase, and let
you start planning just when you will take your personal
time at the beach!
So whether you are looking for an
investment home, a starter "beach box," or an extravagant
oceanfront estate, take the time to call Windswept
Properties @ 1-800-758-2560, and get ready for some fun on
North Carolina's Outer Banks!!! |
