Don't Regret Your Lake House: Questions to Ask Before Buying
Waterfront homes are highly desired pieces of property, and for good reason, because they offer a fantastic lifestyle. Owners love the ability to enjoy water recreation activities year-round, the quiet summer nights relaxing on the deck and feeling the warm breezes, and the crisp nights sitting around a fire pit and enjoying the moonlight dance off the ripples of the water.
Many potential owners easily paint the picture of how they'd like to live, but they don't take the right steps to make sure their waterfront property will be a good investment. Read on for the questions to ask during the process of waterfront home buying to ensure the best-possible returns.
What's Included In a Waterfront Home Purchase?
Essentially, there are two parts to buying a waterfront home: the house itself and the property. What's included with the home structure itself will generally be pretty standard, but what about the land aspect of the purchase? Water rights in your area may impact what you actually own. All buyers should carefully examine what exactly "waterfront" means since there can be a few different definitions.
- Does the home have actual access to the water, or does waterfront simply mean being in a neighborhood with water views?
- Is the land along the lake usable (e.g. is it "beachy" or "rocky")?
- Who has use of the shoreline located on or adjacent to the property?
- Do any of the roads, docks, or other areas allow use by other residents or the public?
- Does the private property sit next to a public beach that affects water rights?
- What other potential easements or right-of-way clauses exist?
- Is the home built on leased property?
The reality of what constitutes a waterfront home purchase may look very different than what was envisioned. The solution is to look at land and neighborhood plat surveys. These will highlight any boundary issues, answer the above questions, and help you make a better investment.
Has the Home Been Well-Maintained?
Waterfront homes are beautiful, but they also are more exposed to the environment. To make sure there aren't any surprises, buyers should ask the following:
- Does the flood history previous incidents of flooding?
- Is the home equipped with the proper flashing?
- Is the home perched on and overlooking the water or alongside it?
- Can the home withstand strong winds or flooding?
Aside from asking questions, it's a good idea to have a home inspection to carefully comb through the home and determine if there are any moist spots or deterioration, or if any other obvious and hidden issues exist. Next, determine whether any problems that are found can be mitigated.
What Are the Yearly Maintenance Costs?
After evaluating how well the home's been maintained, you should be able to get a good idea of how much work it'll require if you buy it. Waterfront homes have a few unique features that create regular maintenance responsibilities.
- A few continued maintenance items for waterfront homes include:
- Docks and seawalls need to be inspected and repaired/replaced as needed
- Homes built on stilts or elevated must have their foundations checked regularly
- The landscaping around the property needs special care to ensure it can withstand being next to the water (e.g. salt damage)
- Aquatic plants need continuous maintenance
- Boat lift maintenance
Be sure to include these additional maintenance costs in your ongoing budget.
Does the House Have or Need a Bulkhead?
One of the big questions you'll want to ask before buying is whether or not it has a bulkhead.
What is a bulkhead?
In the context of property on a lake or ocean, the bulkhead is a wall that is built to provide robust separation between your property and the adjacent body of water. All bodies of water, from creeks to oceans, can cause erosion. These retaining walls reduce the risk of eroding land and flood damage.
Asking about the bulkhead before buying a can help you make a more informed decision.
If the house doesn't have a bulkhead and requires one, bulkhead construction could be expensive and time-consuming. However, installing one could increase potential resale value. The cost of the bulkhead could also eliminate the need for expensive repairs in the future.
Inquire about the water adjacent bulkhead so you can compare the cost of installation against the potential savings and resale value. Water levels can vary; make sure your investment is protected in all seasons.
Does Your Homeowners Insurance Include Flood Coverage?
Traditional homeowners' insurance policies don't cover certain events. Lenders may also require qualified buyers to purchase supplemental insurance policies.
Important questions relating to insurance include asking if there are any unusual insurance expenses associated with the property. Owners are often required to purchase additional policies alongside their traditional coverage. Common additional insurance policies include flood insurance (check flood map and current flood certificate), windstorms, and earthquake insurance, though it depends on the home's location.
While the insurance may be an additional expense, having enough insurance ensures the ability to enjoy a happy lifestyle knowing the property is protected.
Is The Waterfront Home a Good Investment?
The allure of waterfront homes increases their buyer demand and potential for appreciation, making them a worthwhile investment. For many owners, it's living the dream of enjoying the feeling of always being on vacation even when they're not – the perfect work-life balance.
Not to mention, owners can enjoy the home when they live in it before cashing in and moving on to a different property. Or, they can use the home as a vacation property and rent it out during times of the year they aren't using it (just be sure to get familiarized with IRS rules regarding rentals). Homes on bodies of water are always the most popular with renters, so waterfront homes are excellent real estate investments to add to help diversify portfolios.
While waterfront living may be your dream come true, it's important to ensure that it's also a good financial investment. After all, you don't want to pour your life savings into a property that won't appreciate or will be an ongoing money pit.
Too often, people don't ask these questions and they ultimately regret buying a lake house.
Waterfront property can provide lucrative dividends and an enhanced quality of life. As exciting as those promises can be, it's important not to rush the decision. Slow down, ask the questions provided in this article, and make a worthwhile investment. Your patience will be rewarded.
Ready to Start Living the Waterfront Dream?
Waterfront living is associated with serenity, water sports, and simple enjoyment of using the water. Before investing in any waterfront property, buyers should ask the above questions so they know exactly what to expect with their home purchase.
Asking these questions first will free you up to focus on the fun details. Are boats and other essential waterfront home purchases allowed? Is the water quality appropriate for swimming? How's the fishing? Do your home and enjoy peace of mind when buying real estate on the water.