To build wealth, you need to be smart about the investment decisions you make. Saving regularly and religiously is a good starting point, but leaving your money in the bank isn’t going to get you the financial freedom you crave. Real estate rarely fails the investors who have taken the time to understand the field and aren’t impulsive. Thus, don’t hesitate to invest in real estate if it is something you are enthusiastic about. Contrary to what many may have led you to believe, you don’t need a million dollars to invest in. You can start small and build the empire you dream of slowly. Condos are a great starting point. There are many reasons why using a beachfront condo as an investment property is a good idea and below are just a few examples.
Low maintenance costs
Since a condo is not stand-alone, exterior property management is pretty much taken care of for you. You won’t have to mow the lawn or shovel the snow but rather concentrate on the condo’s interior. Also, you won’t have to factor in significant expenditures like roof replacement in your maintenance costs. The only considerable maintenance costs you can incur are related to the systems in your unit and appliances.
There is a condo association to take care of anything related to the maintenance of the building housing the condominiums as well as the grounds. Fewer maintenance costs mean you get better profits when renting out your condo.
Many condo buildings have sophisticated security. Most will have security guards at the reception area, and anyone coming in will need a key to access the building. Also, each unit has an intercom for buzzing in approved visitors or guests. The added security measures make guests feel safer as it keeps them away from solicitors. A lot of people won’t mind paying extra if it means they will be safe. Remember that many people renting out beachfront properties for the short-term are mostly tourists or visitors from different parts of the world/country. Some of the guests will be traveling alone and the assurance that they will be safe during their stay is essential when they are picking accommodation options. Thus, a beachfront condo will be a good investment for you if security is assured.
A huge benefit of investing in a beachfront condo is the access to the high-quality community amenities. There’s usually a fitness room, a pool, as well as a club room in most of them. These are amenities guests find quite attractive. Many people don’t stick to their usual exercise routine while on vacation but a fitness room can make a difference. Properties with abundant amenities are preferred and this means a high turnover. You may be surprised to have the unit rented out all through the year just because of the amenities. Short-term rentals will give you a steady cash flow; hence they should be your target audience when getting a beachfront condo.
HOA (Homeowners association)
An HOA can be seen as a pro and a con depending on how you’re looking at it. There are advantages and disadvantages of being part of an HOA. A few of the benefits were discussed above in the “Amenities” section. If you were to try to have all of these amenities at your single family residential home the price would be through the roof. But when you split it between the group of owners in a condo, the price can be quite affordable. On the flipside, HOA fees can get out of control and the fees can get quite high. What’s important is to find a condo with an HOA that you can live with and amenities that justify the amount you are paying.
In the past, investing in real estate was left for the wealthy because there weren’t many people who had loads of cash or knowledge of leveraging money. However, things have changed and now you can become a real estate investor even if all you have are your savings. Beachfront condos cost much less than a townhouse or a single-family home. Nevertheless, don’t expect to make money instantly due to startup fees and vacancy. You need to set a daily or monthly rate that can attract the greatest number of rentals. On the same note, charge reasonable rates to attract renters. The first months may be tough when not many people know about your property and you don’t have many reviews but once the first renter comes in and gives you a great review the rest will be easy.
Pride of ownership
Having an investment property is something to be proud of. Not many people have enough money left to invest in real estate, which is why you should be proud of the efforts you have made to get there. The investment will open better doors for you because you’ll meet other real estate investors who can guide you on what you should do next once you have secured a beachfront condo.
Unlike most residential condominiums and single-family homes, beachfront condos have a limited availability. This is because there is only so much buildable property available along the more popular beach communities. Many popular vacation resort areas are completely built out on the beach. Because the supply cannot be increased by building additional condos the demand increases, which also helps with appreciation. Another benefit of the limited availability of condos is when it comes to resale condos located along the beach tend to sell well in all market conditions.
An additional source of income
Having more than one source of income is highly encouraged because you will be making more money and comfortably meet your needs even if you lose your job. Businesses can go under overnight and pandemics can happen and you wake up the next day with no job. If you have diversified your investments you will have enough to keep you going until you figure out your next move. Additionally, many people love beach destinations and typically go for waterfront properties. Thus, having a beachfront condo will work in your favor and you’ll never be short of guests.
Many tax benefits to earning investment property
On top of earning money my ranting your condo there are additional benefits. Owners of investment properties are able to take advantage of numerous tax benefits. Of course, everyone’s financial circumstances are different. To find out exactly how owning a waterfront condo as an investment property will affect your taxes it would be best to contact your account or CPA.
A few examples of tax deductions that you could receive would be:
- Property tax
- Mortgage interest
- Capital improvements
- Repairs, maintenance, and upkeep
- Property management fees
Condo rules safeguard the property value
When you are investing in real estate the idea is to see the property value go up. In a condo community, there are more rules to be followed to preserve the property’s value. Renovations or changes to the property that haven’t been thought through can lead to property depreciation. Investing in a beachfront condo with strict rules on matters to do with safeguarding property value will pay off in the end.
Also, the rules ensure all condo owners are keeping their properties in the best condition to maintain home values and make the overall building look attractive. This will guarantee you full bookings all through the year. With single-family homes or townhouses, the rules aren’t strict and what the neighbors decide to do with their properties can cost you in terms of property value. You need to think like an investor when you are buying a vacation rental or investment property and a beachfront condo will not fail you.
You can vacation there anytime
No matter how many beach destinations you have gone to, none is the same as the next one. Thus, you will never get tired of living at a beachfront. If you own a beachfront condo you can up and leave anytime, you want. You only have to worry about transportation costs. Accommodation can be costly, especially if you are searching for options last minute. However, for beachfront condo owners that is not the case because you are sure you have a great and secure beachfront condo waiting for you anytime you feel like taking a break from your daily routine.