Buying at the Beach: Can Your Fantasy Become a Reality?

by Mark Wellborn

Buying at the Beach: Can Your Fantasy Become a Reality?
Homes in the Outer Banks by Keegaroo

There is perhaps no better feeling than hopping into your car on a Friday afternoon in the summer with the knowledge that your empty beach house is a few hours away. However, for most this is fantasy, not reality.

Even though prices have been dropping for about a year in beach communities close to DC, buying a vacation home is still an undertaking that requires a large chunk of money and a good deal of thought and research.

Before even starting the search process, a prospective buyer should confirm with a financial professional that they are in a position to afford a second home. Most people are not in a situation where they can start paying off a second mortgage while they are still paying off that of their first home. As we noted earlier in the week, the annual payments for a beach home just under $1 million can be upwards of $60,000.

“Preparation is crucial when buying a second home, and re-arranging your finances before you even start looking is a very good idea,” Kim Hook of Bethany Beach’s Remax By The Sea told UrbanTurf. “A lot of people put the cart before the horse, so to speak, and start looking before making sure that they can buy. That is not a good idea.”

Prospective buyers should not only calculate what they can afford in terms of a down payment, but also take into account what they will need to spend on furnishings, general maintenance and insurance. Since Hurricane Katrina, insurance payments have skyrocketed in areas close to the ocean.

“Some insurance companies have pulled out of our area completely,” Hook said of the area around Bethany, Dewey and Rehoboth. “State Farm won’t touch anything east of Route 1 [oceanfront]. And in the past, you paid about $2,000 a year for a big home. Now people are paying double that for insurance.”

The good news is that the increase in insurance premiums is offset by dropping home prices. Hook notes that there is a lot of inventory on the market these days, and the prices are not nearly as high as they once were.

“When the market was hot, people were buying anything,” she said. “A ‘tear down’ house (shack) could go for $1 million and the owners would just tear it down and use the land to start over. These days, that is not happening.”

While the prices may be low, unless you are in a position where you can have the house to yourself all year round, you will need to rent it out for a good portion of the summer. This also requires money. Heather Allen of Kitty Hawk Rentals in the Outer Banks explains.

“It is possible to rent your home yourself but the majority of the properties in this area use a management company,” Allen told UrbanTurf. “That way the owner does not have to deal with the hassle of cleaning and maintaining the home after each set of guests.”

If you do decide to save some money by renting the home yourself, keep in mind that it is not realistic to think that the money you make renting during the summer months will come close to paying your mortgage.

Allen, who has been in the Outer Banks market for ten years, noted that a four-bedroom, two-bath in Kitty Hawk rents for $1,495 a week in the peak summer months. The monthly mortgage on a similar property would be almost triple that.

“At one time, it was a very real possibility to think that you could pay off your mortgage with the money you made from rent,” Allen said. “However, beach properties in the Outer Banks have appreciated so much that this is just no longer possible.”


Join the discussion

UrbanTurf now requires registration in order to post comments. Register here, or login below if you are already registered.

Click here if you forgot your password.

Auto-login on future visits

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Looking to Give People A Reason to Stay Past 6pm
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Hitting Its Growth Spurt
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »


Profiles of 14 neighborhoods in suburban Maryland

Small-Town Living in the State Capital
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
DC’s Northern Neighborhood on the Cusp
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Getting a Vibrancy of Its Own
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Not To Be Confused With Takoma Park
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

New Development Could Shake Up Pastoral Peace
A Little Bit of Country Just Inside the District’s Borders
Not to Be Confused With Bloomingdale
Fort Totten
Five Years Could Make a Big Difference
H Street
A Place To Party, and To Settle Down
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
Evolving from a Brand to a Neighborhood
Ripe for Investment Right About Now
The Difference 5 Years Makes
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 neighborhoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »

Upcoming Seminars ▾