Want To Buy A Waterfront Property? Avoid These 3 Mistakes
There are a lot of great reasons to invest in waterfront property. Homes located on the water make great vacation or full-time homes, offering your family a range of water-based activities they can participate in during their free time. If you like entertaining, a waterfront property is also a great backdrop for a party. And waterfront homes are in high demand for short-term and long-term renters if you're interested in making money as a landlord. But the process of buying a waterfront home can be a little more complex than buying an ordinary home, and you'll want to avoid making mistakes that can complicate the process.
Waiting until the Last Minute to Secure Financing
In general, it's not a good idea to wait until the last minute to obtain financing, but when it comes to an ordinary property, if you know that your credit score is good and you have the funds, you can take a little more time.
However, waterfront properties often require specialty loans because they're more expensive than landlocked properties, and specialty loans require more scrutiny and take more time to underwrite. If you wait until the last minute, the sale could drag out, and if it takes too long, it could sabotage the deal entirely.
Not Taking Flood Insurance Into Account
When you buy a home on the water, you're definitely going to have more of a risk of flooding than when you buy a landlocked home. Just as you calculate homeowner's insurance into the cost of owning a home, you're also going to have to calculate the cost of flood insurance.
Ask your real estate agent to recommend a few flood insurance agents in the area so that you can compare quotes. Do some research into the changes in the water in the area as well. If the sea level in the area is rising, then your insurance premiums will be rising right along with it.
Passing on a Close Inspection of the House
Home inspections are important no matter where a house is located, but homes located on the water take more abuse than landlocked homes. The risk of water and storm damage is high, and if the home is located on the ocean, then there's also the issue of rust from the salt in the water.
Not only should you make sure that a thorough home inspection takes place, you may want to consider springing for a second inspection, just to be certain. And keep your eyes open for features that protect the home from some of the hazards of living near water, like stainless steel hardware, storm shudders, and a taller foundation. These are good signs that the previous owner has put the work into maintaining the house.
Finally, make sure that you hire a real estate agent who has experience with waterfront home sales. They'll know what to look for and can help keep you from making a potentially expensive mistake.