Waterfront Property Investment

Waterfront property investment is any real estate that is in a desirable location near recreational water areas like lakes, rivers, or the ocean. If the property is actually close enough to have a dock or water walkway then it can be even more valuable. This trend of building as close to water’s edge is safe and adds appeal to the property, as often other recreation facilities are drawn to the area so the property can be even more valuable. However, as a rental property investment there are still risks with the waterfront real estate not commonly experienced with other types of rentals.

Risks with the Waterfront property investment

Being close to the water can mean very rigid requirements for septic systems. This is due to the concern of flooding since as contamination of lakes, streams or waterways can have consequences. In addition, there is the possibly of leaks, which can have the same effect. Before purchasing the property find out the condition of the septic system, how often it has been serviced, and how additional service in the area might be added to any spreadsheets being kept on cost analysis of the property.

Make sure before purchasing that renters will actually have access to the water. In some areas of the country just being adjacent to or even on the water does not grant the property owner or renter rights to use docks or boats, or places other restrictions on a seasonal basis. For instance, is fishing allowed all year round? Is there some agreement by owners in the area not to use certain types of boats on the lake etc.?

Insurance against flooding is often a mandatory part of the loan, but will it cover all losses of the buyer or just the loan itself? Additional insurance might be needed to defray costs by all parties.

Know everything there is to know about waterfront property investment

How will the property be used during colder months of the year? Will it still be rented or will a caretaker be needed to check pipes, plumbing or make needed repairs?
Water, especially on a seafront property, can be damaging even without a flood. Sand, salt, wind, and the erosion of the land at the waterfront can damage its overall value and repairs might be needed frequently.

How to find and keep responsible renters for waterfront property investment

Some management services can help both with repairs and managing renters for a fee or percentage of all rents received. For the most part, it is good for the owner of the waterfront property investment to be very familiar with the property and the type of people who can rent it responsibly.