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What You Should Consider Before Buying a California Beach House


What You Should Consider Before Buying a California Beach House

Investing in a California beach house can be extremely profitable but where should you look? First of all, it depends on if you are looking to flip a home or rent out your home. If you are looking to flip a California beach house, investing in home which are far away from the big cities can prove to be very lucrative since the prices are generally lower than houses close to the urban areas.

According to Investopedia, “To find any potential for a good beach house investment, look at the few remaining places where there are fewer people, particularly among the towns of California’s Central Coast. Prices in this area are lower because it is a four-hour drive to the edge of either of the big urban centers and there are very few high-paying jobs.”

Older individuals are beginning to flock to the California beaches that are far, far out of the way. Right now, baby boomers are selling their homes in the city and buying cheaper homes by the beach. For house flipping, Investopedia recommends purchasing homes in Prismo Beach, Morro Bay, and Cambria.

Purchasing a California beach house as a vacation home is a little different. According to Investopedia, “Many real estate investors who find a beach house in an area with high rental demand and keep it occupied throughout the busy season claim to make enough money during those months to cover expenses for the entire year, effectively allowing them to live in the house for free during nonpeak season if they so please.”

However, a California beach house as a vacation home is uncertain as far as investments go. A vacation home, unlike a primary residence, vacation homes are not a necessity, prices can plunge when demand disappears if the economy plummets. In order to make sure that your investment brings in a profit, you will need to do your research.  It is incredibly important to choose a home that can easily be rented at the frequency you will need to cover expenses.

According to U.S. News, “ That means both choosing a community that allows vacation rentals and then making sure you’re set up to take advantage of the rental potential, from furnishing the unit to having a plan for advertising and handling tenants. You need to know before you buy whether you will rent the home when you’re not using it.”

Business Insider offers some advice in regards to purchasing a California beach house, “And be warned: when the economy sputters, so will your rental revenue stream. People will cancel vacations and bargain hard on weekly rental rates, while you must continue paying all your monthly bills.”

Buyers should be realistic about how much they plan to make from their California beach house and they should not be overly optimistic. The home should be affordable without the rental income. Even if there is a steady flow of renters, upkeep can be expensive. Coastal Living advises buyers to play it safe, “Buyers tend to be overly optimistic about how much they’ll earn from renting the home to other vacationers. To play it ultra safe, aim to cover the costs of a house with your own funds. Think of any rental income as icing on the cake.”

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