Sun’s out, so let the beach house daydreams begin Explore creative ways to afford a second home

By JUSTIN NOBLE

As the weather in the D.C. area warms up, we are all thinking about those sweet summer days. What if I told you that you could make those dreams a reality for very little cash? What I mean by that is that there are several ways to creatively look at methods to purchase a second home at the beach and have very low overhead.

First, you should realize that you will only be approved for what you can afford. While most of us have Titos tastes and a Bernetts budget, we need to come back to reality and realize that a pre-approval with a reputable local lender will provide a budget for you – while still needing to think through the lifestyle you maintain and what getting a second home with additional responsibilities might look like. If you’ve decided that YES you want to purchase a second home at the beach, let’s look at creative ways to pay for said beach house.

House shares are a great way to split up the cost of beach house ownership. If you have a few good like-minded friends that have similar beach house aspirations as you - then see if they would go halfsies with ya! If you are not keen on the idea of three parties having an ownership interest in a piece of real estate, I hear you, then think through a lease arrangement. You would be the owner of the residence but friend group A would have a lease stipulating they can use the house every other weekend and then friend group B can use the house every third full week in the month. This allows you as the owner of the home to buy down the mortgage and other home ownership expenses while still having a reasonable amount of time to use the home. This option is a great option if your beach home is located in a town or community in which short term rentals are not permitted.

Speaking of short-term rentals, I think almost everyone automatically thinks about Airbnb when thinking about a vacation home. Let me be very clear - each city, town, and community is so very different in what they do and do not allow. For example, my community at the beach in Delaware does not allow any rentals less than one year. This is what attracted me to that community. That community, however, would turn off 90% of beach house buyers because they want the option to rent out a home. This is where the above mentioned friend house share would come in handy. If you have identified a home that allows for short-term rentals of a week or a threenight minimum then you are good to go. This is a great way to offset a mortgage, however, it’s always important to realize that if you are looking to have a beach house and rent it out some of the time to offset your expense that you will incur other expenses by having a high volume of guests in and out of the home. While your mortgage might go down your incidentals will likely go up.

Off-season rentals are still very much a thing. Those quaint beach towns that you only visit in the summer when they are thriving and serving orange crushes do actually calm down a bit in the winter months. While the tapestry of beach towns in Delaware has changed dramatically over the years, there are still rentals referred to as “off-season” rentals. These rentals are available typically between Labor Day and Memorial Day. Renting your home in the off-season instead of winterizing and closing up the home is a great way to generate funds all year long. This typically works for homes within close proximity to the beach or downtown districts and is not always guaranteed. You also offer this rental at a substantial discount.

The dream of a beach home is within reach for most. Like with most things in life it’s all about compromise and how much you are willing to work for it. A second home in a sought after location within close proximity to metropolitan areas is always a great idea for an investment property. It’s important to ensure you are partnered with a Realtor in a secondary market that understands your clear intentions with a property and can assist with providing rental pro-formas for rental income, market statistics, lawyers etc., to ensure that you are making a sound decision in your beach dream future.

JUSTIN NOBLE is a Realtor with The Burns & Noble Group licensed in D.C., Maryland, and Delaware. Reach him at Justin.Noble@sothebysrealty.com or 202-234-3344.