You might be asking yourself, “Why spend money on a vacation house every year when we could have our very own “Slice of 30A”?
While owning a home at the beach is appealing to many, we advise our clients to plan for and consider the implications of beach property ownership as the first step in their search and purchase process. Finding the right home along the beaches of South Walton and Scenic 30A Florida depends on a lot of factors including; the home style you want; if all the related homeowner costs fit your bigger financial plan; use of the property as a second home, or vacation rental.
To help determine if owning a South Walton Beach Home is right for you, we’ve compiled a list of 5 questions as a starting point.
I 1 I Where’s an ideal place to buy along 30A?
Each one 30A’s Beach Towns and communities has its own unique characteristics.
Properties located in Grayton Beach, Dune Allen Beach or Seagrove Beach offer quaint historic cottages mixed with modern beach homes combined with a “slow laid-back, beach life vibe".
"New Urbanism" style beach towns like Seaside, Watercolor, Alys Beach or Rosemary Beach were specifically designed to celebrate a vibrant coastal lifestyle while also offering amenities within a quick five-minute walk or bike ride. So if locations close to amenities is important to you, then these towns will "check those boxes"!
I 2 I Is having rental income important?
Many South Walton vacationers dream of owning a 30A beach home they can enjoy. It’s a favorite place to return to year after year; making family memories for generations. But, if you’ve never thought about adding your beach house to the rental market, you may be surprised at how affordable owning a vacation rental home can often be. In working with local rental companies over the years, we’ve learned that South Walton Beach homes in locations that offer convenient beach access, water views and amenities, within walking distance to restaurants and shops, can often offer the possibility of higher rental income.
I 3 I Is owning a second home financially right?
Vacation rental properties outnumber second homes in South Walton by a long shot and this trend is reflected nationally according to recent figures from the National Association of Realtors (NAR). Investing a portion of your portfolio in tangible assets - real estate – can be incredibly attractive for many. The prospect of building equity while covering costs through rental income can make financial sense at many price points. It can also potentially allow owners the option to "trade up" to another vacation home in the future, that perhaps they thought not previously possible
I 4 I Does owning a second home – with a mortgage & related costs – fit in the budget?
Generally speaking; homes that are used as vacation rentals or second homes have mortgages with very different terms, compared to your primary home mortgage. Because of all the variables involved with these types of properties, we encourage our buyers to meet with a lender prior to beginning a serious search for their dream beach house.
Owners should also plan and budget for additional ownership costs including insurance, Home Owner Association fees, periodic maintenance and rental management fees, to name just a few. If you’ll be renting your property, expect property management companies to charge between 20-30% of gross rental income. Maintenance on coastal homes may surprise out-of-state buyers. The salt air can be abrasive and dictates frequent exterior maintenance on roofs, porches, decks, air conditioning units and exterior surfaces. Rental properties can sometimes take a beating, so interior painting may be needed more frequently.
Once our buyers are ready to narrow down their property choices, we like to provide “cost to own” projections tailored to each specific property. Additionally, we work with vacation rental companies who will often provide projected rental income analysis that is custom tailored to specific properties. They can also make recommendations changes or upgrades along with cost estimates. The recommendations are geared toward helping to maximize and/or increase rental guests' favorability and popularity of your 30A beach rental home.
I 5 I How will owning a second home or vacation rental affect income taxes?
Buyers should understand and plan for different ways that properties are treated for income tax purposes depending on whether they are held strictly as a vacation rental property or as a second home or for personal use. It is additionally important to know how your taxes will be impacted in the future upon selling this type of property. Bottom-line, be sure to consult your accountant or tax professional and be prepared for the tax implications of owning a beach house from the day you get the keys.