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Are Coastal Properties a Good Investment?

The excitement of taking hard earned funds and spreading them out into various real estate investments is one of the thrills of being a rental property investor. While every home has some potential, there are certain types of houses that seem to perform well regardless of the state in which the home is found. When lake property is unavailable, a person could wonder are coastal properties a good investment in the U.S. This guide will highlight the pros and cons of buying a home on the coast. 

Coastal Real Estate Defined 

Someone who has never heard the phrase coastal properties before could be intrigued to learn more. While coastal is a generic term, the actual meaning of the phrase means homes that are near a major waterway in the U.S. market. Three of the most popular coasts include the Atlantic, Pacific and Gulf Coast where many properties are positioned. 

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3 Advantages of Coastal Florida Real Estate 

1. Proximity to Tourist Attractions

2. Higher Home Values

3. Upper-Class Neighbors

Homes along the coast in cities like Jacksonville, FL do provide popular surroundings. From cruise ports and beaches to zoos, a person owning or renting a home on the coast has a lot of tourist attractions to discover. 

Because homes near water usually cost more, home values typically rise each year regardless of changes in other markets. The value of a coastal house rarely drops unless the home is in distressed condition or has been damaged by severe weather. 

Neighborhoods in nearly all coastal towns are typically free of crime or typical urban problems. Many adults who rent homes from investment companies or investors seek homes that are in developing areas and have a safe neighborhood reputation. 

3 Disadvantages of Real Estate by the Coast

1. Higher Insurance Premiums

2. Threat of Severe Weather

3. Higher Initial Cost

Homes located within a known flood plain will always cost more to insure. FEMA and other federal agencies publish flood zone guides that help insurance companies to determine which homes are in areas where adverse weather can destroy or damage a home. Flood insurance costs are always higher for coastal houses. 

The jet stream in the United States blow from West to East. This means that homes along the coast will likely experience severe weather especially when positioned in a tropical climate. The threat of hurricanes and floods is one disadvantage property owners experience when evaluating homes built near water ways.

Beach front properties, lake front homes and homes within 5 miles of the coast will always command a higher price. Real estate values rise in neighborhoods that are in the proximity of the ocean. A person seeking an investment or vacation home in a town near the ocean will likely have to pay higher prices compared with a home in an urban area.

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