Buying a home is a dream come true for many.
To purchase that property with river, lake, or oceanfront access may top the list for many individual’s American Dream.
From personal relaxation, giving your family all that waterfront property has to offer, and the possibility of major returns on investment, it’s hard not for the pros to outweigh the cons.
But before plunging into buying your dream house, just take a few minutes to consider these challenges surrounding the purchase of waterfront property.
Observe the Property Closely
When it comes to buying a waterfront property, the most important thing to consider is the land and not the house or structures currently on it. Altering the structure is easy, but the possibilities of altering the land itself is much more complex.
The land itself can have many impeding factors for existing or future development, so don’t hesitate to hire talented engineering, ecological or soil experts to evaluate your potential purchase.
In addition to the land itself, make an effort to learn more about the surrounding areas tourist activity, potential neighbors’ use of the land and water, and any future development. The last thing you want after a waterfront land purchase is to find out your plans and investment are hindered by factors out of your control.
Check Insurance Requirements
Unlike normal land or homes, waterfront properties often come with their own set of insurance requirements. Some factors mentioned above can have outsized effects on your homeowner insurance premiums, as well as additional flood insurance costs.
You can get more details from the National Flood Insurance program here.
Even though the amount may vary, it is always better to be covered when a massive flood causes thousands of dollars damage to your home.
Another type of insurance that you might be wise in investing in is wind insurance. Your properties geography and the makeup of the surrounding land mass may cause increases in wind speeds.
All of these insurance requirements can be estimated with early due diligence on your potential waterfront investment, so begin diving into pricing them out as early as you can.
Check Legal Factors & Requirements
Waterfront property often comes with additional legal factors to consider, depending on your planned use or activities on the land. Understanding these legal factors will save you time and headaches, so don’t neglect this due diligence task.
Your State government will have guidelines and laws around building additional structures like docs, sea walls, boat houses and even guest houses.
Hiring a reputable real estate lawyer will give you give you piece of mind and help guide you while planning for this investment.
Assess The Value Of The Waterfront Property
Although this might be the first thing you consider before investing in a piece of waterfront property, you might do well to check on the first three tips first. Each may have a significant effect on the value of the property, which will help you decide whether to purchase the land or even provide you with additional information for price negotiation.
Oftentimes the value can depend on the availability of water sports activities, proximity to the waterfront, and even distance from municipalities, stores, schools, etc…
Put major effort into assessing the value of your potential waterfront land, the existing structures, and the surrounding property values and you’ll save yourself from losing money on the investment.
Hire a Real Estate Agent
The right real estate agent can provide intangible knowledge and support during the entire investment process, so don’t balk at finding the right help.
Local knowledge, connections, and even friendly repartee amongst the homeowners and other real estate agents can all be contributing factors to a successful property investment. Hiring the right agent will also save you a lot of time and effort in the long run, so take the opportunity to hire the best agent you can find.
The tips above are only the beginning of the necessary due diligence when investing in waterfront property, but starting with these five will get you off on the right foot.
To view Northern Michigan Land Brokers current waterfront properties, click here.