Things to consider when buying any waterfront vacation home.
First
off, congratulations at looking to the Keys for a possible vacation home.
The good news about the Keys from an investment angle are:
- There is only so much waterfront or Coastal property available.
- The Keys have strict environmental laws that affect building permits. This means there are only so many homes and always will be a limited number of homes here. One big reason for this is there is just ONE Highway in and out of the Keys. (US1) If there is an emergency, people need to have the ability to leave quickly and so for this reason alone, the Keys will never be California. The other main environmental consideration is the water quality. The Keys main attraction are water sports and Monroe County is going to make sure that our waters are clean and usable.
To consider when purchasing any waterfront vacation home and how
the Keys measure up:Is there a view?
Views really do matter. An unobstructed Ocean view adds as much as 60%
to the value of a home per the Journal of Real Estate Finance and Economics.
Proximity to Golf courses or a park can add as much as 20% to a homes
value. This is per an article by a much published author named
Soren Anderson, a writer from Manchester College.
Consider
the recreational activities…
The What and the When.
For example in a Ski resort area, your options are limited due to weather
considerations and the total amount of activities available is definitely
less.
*In the Keys, about the only thing you cannot do year round are mountain
climbing and white water rafting.
Boating access and controlling depth
Is there direct boating access on the property? If so, how large
a boat can you have behind the home? This is determined by what we in the
Keys call controlling draft or depth. For example: If a boat is under 30ft
in most cases 3 ft draft is OK. Draft means...what is the lowest water
depth you have to go through to get to open or deep water.If you have a
sailboat or 50 ft boat you will need deeper draft such as 5ft.
Now..obviously if you have a 50 ft sailboat behind your home, the canals
or waterways have to provide you with turn-around room.
If the access is deep draft, then expect prices to go up. If there is no
water acess at the home or the draft is for kayaks only, in most cases
expect a drop in price.
If there is no direct water access...how far is the nearest boat ramp or
is there a boat slip available? If so, is it included and what is the draft
out of the boat slip.
So the boating issue has a very direct effect on pricing here. Neighborhoods
with bigger canals and deep draft boating are generally home to the Million
dollar and plus homes.
Nearby Medical and shopping options
These are very important considerations. If there is an accident, how far
away is a hospital?
In the Upper Keys we have Baptist hospital in Tavernier which is an excellent
option.
If you need groceries or restaurants, what is nearby?
Oftentimes vacation properties can be secluded and don’t offer easy
access to the above. At first being remote can seem as desirable, but in
the end it can grow old quickly.
This also affects home values by the way. If you can have the vacation
feel and recreation, yet have amenities nearby, the prices go up.
On thing about the upper Keys is that Miami and South Beach are just about
an hour away and World famous Key West, 2 hours.
How much room do you need?
If you own a home with nearby recreation and sightseeing, expect people
to come out of the woodwork. Everyone will be your friend. Larger homes,
with more bedrooms, a 3/2 and up always rent better. So if you can, get
a home with extra space.
Type of Construction or is it built to
last.
The age of the home will determine the building code that it was built
to. In the Keys newer homes have to be built to strict specs as to wind
handling characteristics.
Also, look for low maintenance homes.
Lots of homes in the Keys are made of concrete block and have pea-rock
for yards and the outside is stucco over concrete or frame. This means
lower maintenance, which is very important for an absentee owner.
Finding renters
Does the home have good rental potential and is there local rental management
available?
This is a very important consideration, both for long term and short term
vacation rentals.
Remember, even if you don’t want to rent, this can be an important
consideration for a future buyer or if your situation changes.
Home maintenance.
Are there nearby electricians, plumbers, appliance stores and general contractors.
If anything does happen, the prices to have things repaired or replaced
will be less if there is competition and service people are nearby.
Check with the REALTOR you are talking with to get a Vendor list of who
the Real Estate company uses to service their rentals and offices.
Rules and Regulations
Make sure you are clear on and have copies of any deed restrictions or
condo docs as to what is allowed and what is not. Too many rules can
be appetizing for some but a turnoff for future buyers. For example if
you have children who will want to use the property in the future as
a college break, lots of communities can prohibit it.
In conclusion, the upper Keys offer good investment potential from an
appreciation aspect and income potential from renters.
Regarding Appreciation.
Because Miami and Ft Lauderdale are a short drive away, people there look
to the Keys as a getaway. Think New York and the Jersey shore. We sell
a majority of homes to people from these areas.
Income potential.
About 50% of the vacation renters in the Keys are from Florida. They come
here because the Keys are a completely different experience. This means
as Florida grows (it is on pace to be the 2nd largest state in the USA
by 2010) we will have more people looking to vacation here. This will drive
prices up and make rental occupancy rates climb even more.