Why a Beach House Is a Good Investment for a Vacation Rental

The Evolve Team
The Evolve Team
August 31, 2023

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

According to our 2023 State of Travel survey, a “waterfront getaway” is the top vacation experience travelers are planning. And 59% said they were interested in booking a beach house more than any other property type.

It’s not too surprising — beach houses provide a certain 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. Look no further than our best places to buy a beach rental to see what we mean!

If that got you thinking, “Is a beach house a good investment?” then here are the top tips for buying and owning a beach property in today’s vacation rental 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, owning a beach house can have high profit potential for first-time renters and seasoned experts alike. But there are still some pros and cons of owning a beach house 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 decided that a beach house is a good investment and established your goals, you can use them as a guidebook for making the buying choices 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 your goal is to have a home that you can enjoy for personal use, our real estate experts say it’s worth starting with destinations where you love vacationing, then 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 markets can offer impressive returns, but listing prices vary widely. Several destinations on our list of best places to buy a beach house have homes priced well under the $400,000 mark, while the most expensive market featured is Seabrook Island, SC, where the median price is $674,000.

There’s also property type to keep in mind. A common question people ask: do beach condos pay for themselves? They’re typically more affordable than single-family homes on the beach, our 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 Evolve to buy, we connect you with our network of licensed real estate agents and lenders that specialize in short-term rental so you can 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 wave of bookings — and when you should expect a sprinkle. 

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 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 — and for all of the travelers who expect this service at a five-star rental.

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 team says. The closer you are, the better, so vacationing guests can easily carry beach amenities like umbrellas, coolers, and chairs.

The Best Time 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 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 rental market — or scoop up property in an up-and-coming destination.

Areas like Gulf Shores, AL; Hilton Head, SC; and Galveston, TX are among the most popular beach destinations on our best places to buy a beach rental list, especially for families that come back year after year. Some lesser-known gems, however, include Hampton, VA (an alternative to popular Virginia Beach) and Ocean Shores, WA (where rugged coastline and laid-back charm woo West Coast travelers).  

Our 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 on the shore.

Here are some extra factors to consider that can boost the appeal of your property, impact your revenue and occupancy goals, and help you lock in whether a beach house is a good investment:

1. Beach Views

Renters coming to the beach for a 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. If you think a beach house is a good investment for you, 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 customized for you, complete with professionally shot and edited photos that get more guests to stop, look, and book.

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 and boost your revenue.

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 (one of our most-booked amenities), 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 experts take 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,  a beach house is a good investment and there’s never been a better time to grow your property portfolio. Take the first step toward realizing your income potential by connecting with our 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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