Thinking of buying your dream holiday beach house in Miami, trying to invest in Florida real estate or looking to move closer to the waters? Buying a beachfront home can deliver excellent ROI, diversify your income and providing a free vacation whenever you want to travel.

Many people who own ocean-view houses in Miami rent them out for most of the year (especially during peak tourism periods) and visit during off-peak periods.

Investors claim the high demand in the summer generates enough revenue to maintain the home all year-round and still have substantial profit left over. Before taking the plunge of buying a beach house in Miami, you should understand the cost of buying real estate in the area including taxes, insurance, location and other factors that could influence your decision.

Can you afford a beach house?

Wherever you go in the US, beach houses don’t come cheap. You can’t always count on your ability to make a profit from the home or break even. Many homes in Arizona, Florida and Nevada lost their value during the recession. On the flip side, prices recently rebounded so those who bought during the recession should be making a killer profit right now.

Financing your dream home

US banks require at least a 20% down payment for Americans looking to buy a home in Miami. If you’re buoyant, you could buy the land and build on your own or pay full price on the house to skip mortgage payments. A third option is to borrow against your investment with a line of credit. You don’t have to dip into your stock market investments where you have the option of getting cash from a flexible line of credit secured by a wealth investment group. This ensures your diversified assets stay working while you buy your dream beach home.

Finding the right beach house

The first thing to do is to settle your finances and ensure you have a means of financing your home. You’ll need the services of a reputable realty firm in Florida such as BHHS Florida Realty. A realtor can help you find the right beach house that meets your needs and negotiate prices on your behalf. This is an especially useful skill for new homebuyers who don’t know a lot about the housing market or lack good public relation skills.

Do you have plans to rent out your beach house?

Even when you’re not residing in your beach house, there are taxes to pay and maintenance costs to cover. A rental program can help to mitigate the cost and turn a profit. Your options include a traditional management company or an online service such as VRBO or Airbnb.  Hire a photographer to take great photos of the property. To handle payments from tenants, services such as Stripe and PayPal are convenient. You’ll also need a housekeeping service that cleans the property when tenants are in-house.

Seawall inspection

Anyone buying a waterfront property must get a seawall inspection by a seawall specialist or structural engineer. The inspection includes settling cracks in the patio, main house, dock and pool. Most of Miami’s canals are artificially made with landfills, so the seawall could determine the integrity of the structure of the beach house. To avoid future settling, conduct a visual inspection of seawalls in properties close to the one you’re looking to buy.

What type of beach house do you want?

Miami has many types of beach house. An aerial view of the beach or the entire city shows waterfront properties near lakes, bayfront homes, canals with fixed bridges, direct ocean access, no ocean access and rivers.  Houses close to canals with direct ocean access are suitable for homeowners who have a boat. Most people prefer bayfront homes, but this exposes your home to bad weather and hurricanes.  Canal front properties offer more protection against the elements for your home and boats.

Natural disasters do happen

If you’re buying a beachfront home, the obvious risk is that you’re in direct line of fire if a natural disaster happens. Hurricane Irma is a reminder of how natural disasters can ruin lives. Although they rarely happen, prospective homeowners should be aware of the risks when investing in Miami real estate. It’s important that you conduct your research into the frequency of natural disasters in an area before purchasing a beach house. A local realtor can provide more answers on this topic.

The challenge of getting insurance

In addition to homeowner’s insurance, the lender might require flood insurance depending on your preferred location. If you’re buying a home with an older roof, no hurricane straps, and older plumbing, the insurance company will require higher premiums.

To save money, buy a beach house built to withstand high force wind and that offers all the updated trappings of a modern home. It's easier to get home insurance if the home is secured and built in 2002 or  later because it has the latest building code regulations. Insurance costs are always higher for beach houses, especially open bay properties.

Choosing a location

When buying property in Miami, the warm climate is a big attraction for visitors who are used to cold weather. The beach house shouldn’t be too far from shopping centres, good schools, the mall, theatre, restaurants and other top attractions in the area. If you’re buying a beach house with a plan to host friends and families during your vacation, consider the ease of accessibility. If you want to relocate fully at some point, think about proximity to healthcare services.

Determining the true cost

If you’re not living in the beach house full-time, you’ll need to get a top-notch security system to keep your home safe. Unoccupied homes are at a greater risk of being burgled. There’s also the cost of your mortgage, home insurance, flood insurance, property tax and real estate agent fees. Once again, a real estate agent is in the best position to drum up a rough estimate of cost.

Conclusion

Buying a vacation beach house in Miami is a dream come true for many people. With great views of the waters, easy access to your boat, idyllic walks on the beach, soaking up the sun and lots of fun activities to do, Miami is a great place to be. However, it’s just as important to do your research before making a final decision.