Why a Beach House Might Be Your Best Vacation Rental Investment

The Evolve Team
The Evolve Team
January 18, 2022

For many travelers, dream vacations have one thing in common: a beach. 

According to our 2023 Travel Trends forecast, a “waterfront getaway” is the top vacation experience travelers are planning in the year ahead. And while they’re on vacation, 56% say their favorite thing to do is take time to relax. 

Beach houses provide that exact kind of vacation magic. Salty air and the lull of waves work in tandem with totally private, home-away-from-home energy to create unique vacations filled with R&R.

So, yes, a beach house can be a good real estate investment. In fact, Evolve bookings per beach house listing increased by 47% in 2021, with a 15% increase in the average value of those bookings. Not to mention there are some standout beach destinations on our list of best places to buy a vacation rental.

So if you’re interested in joining the vacation rental industry, here are the top tips for buying a beach house in today’s market.

In This Article:

Questions to Ask When Buying a Beach House

The Best Time to Buy a Beach House

Where to Buy a Beach House

How to Buy a Beach House

Questions to Ask When Buying a Beach House

Vacation rental with ocean views from the balcony

Given the demand for vacations by the ocean, beach houses have high profit potential. But there are still some key questions for potential investors to consider when weighing their options.

1. What Are My Overall Investment Goals?

Investing in short-term rentals helps homebuyers meet a number of goals, so you first want to figure out what benefits you’re hoping to get out of it. It might be to offset expenses, build equity, generate a profitable revenue stream, or qualify for certain tax deductions

Once you’ve established your goals, you can use them as a guidebook for making the buying decisions that work best for you. 

An area’s cap rate (the key metric that sets expectations around return on investment) can then help you zero in on the best places to buy a beach house that will help you hit your financial objectives. Or, if having a home that you can enjoy for personal use is among your goals, our Real Estate Services (RES) team says it’s worth starting with destinations where you love vacationing, and analyzing the cap rate from there.

2. How Much Does It Cost to Buy a Beach House?

Determining the upfront costs of buying a beach house, as well as how quickly you could recoup your investment, can help you find the best property worth your hard-earned dollars. 

To start, you want to consider the areas you’re interested in. Popular vacation destinations can offer impressive returns, but listing prices vary widely by market. Several destinations on our list of best places to buy a beach house have homes priced well under the $300,000 mark, while the most expensive market featured is Lahaina, Hawaii, where the median price is $787,000.

There’s also property type to keep in mind. Beachfront condos, for example, are typically more affordable than single-family homes on the beach, our RES team says. But you also need to factor in extra costs like HOA fees, local taxes, or maintenance needs. Working with a knowledgeable realtor who specializes in both the area and vacation rental properties can get you valuable insight into what your total spend might look like, and our vacation rental income calculator can help you estimate profit margins with those expenses factored in.

When you work with our Real Estate Services team, we connect you with preferred local agents who have vacation rental expertise and can help you find the best home for your budget and goals.

3. Does This Destination Have Year-Round Demand?

Learning when demand peaks in an area helps you understand when you might get a flurry of bookings — and when you should expect a lull. 

While beach vacation rentals tend to see the highest demand in summer months, some year-round warm-weather destinations (like those in southern Florida and Hawaii) draw snowbirds seeking sunny escapes, too. 

With more people working remotely though, our RES team says marketing your listing as a place to come relax during the off season can help extend the rental season. Just make sure you have great WiFi for remote workers looking for a change of scenery.

4. What Role Does Beachfront Proximity Play in This Market?

When you’re zeroing in on where to buy a beach house, the “location, location, location” mantra is an important one. Homes that are closest to major attractions (in this case, the sandy shores!) typically generate the most interest, as do those that are close to downtowns, boardwalks, and piers.

For that reason, top-performing beach vacation rentals largely have direct access to the sand and surf. (Many condos even have their own private stretches of beach, which can be a prized, value-adding amenity.) If you’re marketing your property as a beach house, it should be within two blocks of the beach, our RES team says. The closer you are, the better, so vacationing guests can easily carry beach amenities like umbrellas, coolers, and chairs.

When to Buy a Beach House

Wood walkway leading up to large beachfront vacation rental

You’ll see more beach houses on the market — and at lower listing prices — during the off season, our RES team says. But the “off season” can vary depending on the location where you’re looking to buy. 

In most beach markets, the majority of listings pop up in the fall or winter, which bucks the traditional spring and summer buying season in real estate. (Current vacation rental owners usually won’t sell in the months leading up to their busy season or during the peak season.) However, you may be able to find spring and summer listings in some destinations like southern Florida, which often experience high seasons in winter months. 

An off-season purchase means you’ll have ample time to complete any renovations needed before you start marketing your property. You’ll also have time to furnish your vacation rental, getting it in tip-top shape for the five-star guest experiences that maximize profits once the busy rental months roll around.

Where to Buy a Beach House

Interior living room space with flat-screen TV, fireplace, and large windows overlooking the ocean

Another key consideration that will help determine whether a beach house is a good investment: geography. There’s the option to invest in a well-known vacation spot — or scoop up property in an up-and-coming destination. 

Areas like Gulf Shores, AL, Destin, FL, and Cape Cod, MA are among the most popular beach destinations on our best places to buy a beach house list, especially for families that come back year after year. Some lesser-known gems, however, include Surfside Beach, TX (an alternative to popular Galveston) and Ocean Shores, WA (which appeals to beach lovers and national park explorers because of its proximity to Olympic National Park).  

Our RES team is also seeing a trend of beach vacationers wanting to be within walking distance of downtown. That way, they have the option to shop, visit galleries, and dine out when they’re not splashing in the shore.

Here are some extra factors to consider that can boost the appeal of your property and help you hit your revenue and occupancy goals:

1. Beach Views

Renters coming to the beach for vacation love having a perch to take in the pretty views. If you’re investing in a beach condo, look for properties that have ocean-facing balconies. At beach houses, a deck or patio will add value to your property. Be sure to market the stellar views by showcasing them in the listing description and photography.

When you work with Evolve, our marketing experts craft click-worthy listings for you, complete with professionally shot and edited photos that put you a step ahead of the competition.

2. Beach Access

For those looking to book a beach house for vacation, the sandy shores and the ocean are prime perks. Because of this, properties that are steps from the shore will be the most lucrative. Just remember they’ll probably be more expensive than the homes that are a few blocks away from the beach.

3. Beach-Friendly Amenities

Top-performing beach rentals that turn guests into repeat bookers include thoughtful amenities like grills (to barbecue or enjoy the catch of the day), fire pits, and safe swimming access that isn’t muddled by weeds or rocks. Buying a property that has the space or accessibility for these can help your listing stand out.

4. Pools

Those vacationing at beach houses like to have the option of pool days, too. Buyers should look for properties that have private pools or hot tubs, or you can zero in on condos that give guests access to pools located on the property.

How to Buy a Beach House

Modern beach house with palm trees on a clear day

When it’s officially time to search beach houses for sale, finding the perfect one can be a minefield to navigate on your own. Our Real Estate Services team takes the guesswork and heavy lifting out of the equation by helping you:

  1. Define your personal and financial goals
  2. Understand the nuances and earning potential of any market 
  3. Connect with preferred real estate agents in the area for expert local assistance
  4. Manage your new property to maximize income and stay ahead of the competition

Of course, if you want proof of performance upfront, our listings for sale page features beach homes that already have a proven track record of vacation rental success as Evolve properties.

Frankly, there’s never been a better time to invest in a beach house. Take the first step toward realizing your income potential by connecting with our Real Estate Services team today. We’ve got the experience, tools, and specialized partners to help you maximize success at a fraction of the effort it would take to do it alone.

Find the Perfect Vacation Rental Property

We’ll make it easy to define your financial goals, collaborate with preferred agents, and start a thriving vacation rental business.

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