A beach investment property, a type of real estate investing, could be a great way to invest your money in something that is likely to pay off down the road. Beach property investments can range from purchasing land, a house or condo. There are two ways money is made with the investments, renting and sale of property at a higher rate than when purchased. Learning a little about the types of property investments and the ways to profit will help you a lot in your quest for a investment property

Beach houses and condos are very popular rental items for families on vacation.  You will be able to make a decent amount of money from renting during the busy season.  The off season (winter/late fall/early spring) will typically have little to no income.  Renting can usually make pretty decent amount of money, but you will have to maintain the house during the busy season.  In between renters, the house will need to be cleaned and any items repaired.  Major improvements or repairs can wait till the off season, but minor things have to be addressed.  This can be a little difficult if you do not live nearby, and would require hiring a cleaning crew or handyman to fix things.  Fortunately, most areas have people who specialize in these tasks, which make it much easier to manage a beach investment property remotely.

Purchasing land is simply buying undeveloped land near or on the beach. Typically, it is impossible to find beachfront land, and if you do it is probably very expensive (therefore a bad way to start an investment). Frequently land can be found that is just off the beach or shore, and holds potential value.

Whether the land is on the beach, shore or just off, it must hold potential value to be deemed a good investment. You need to consider a few things to help you decide if it is good or not.

First off, determine why the land is for sale. Sometimes land is put up for sale that does not allow a house to be built because of rules or unknown problems. For example, if there are zoning restrictions that would not allow a house to be built on the property, it would not be very valuable unless those zoning rules were changes. In addition, if there was a lot of unstable ground or sinkholes in the land, building a house could be impossible or prohibitively expensive. These things would make the land a bad choice for investment.

Second, research the area to see if it has all the necessary utilities to support a house. For example, does it have sewer access or ability to have a septic system installed? Is there electricity and water? If the land does not have access to the basic utilities, then it will not be very valuable. If it doesn’t have these, don’t discount it completely though. Sometimes areas that are close to highly developed areas might not have all the utilities at the time, but they might in the future. If you find land like this, it will allow you to get it for a low price. You can then sit on it for a few years until utilities are there, and then sell it for a good price.

Lastly, make an evaluation of the area and what potential residential development and commercial development project might take place. If the land is surrounded by a nice field or forest on one side, and the beach on the other, it could be very profitable. If the field or forest is destroyed by development, then the land might not be as profitable, if at all. Development can bring huge value to some places, and kill the value of others. Thing long term about your investment to make sure it will pay off in the end.

Purchasing a house or condo is going to be a larger investment up front, but will give you the benefit of having an income from renting almost immediately.  If you purchase a condo or house that is in perfect shape, you will pay more for it upfront, but have much lower need for improvements.  If you purchase a house or condo that need improvements, you will pay a lower price upfront, but will need to invest money to get it in to perfect shape.  Either way, you will have 2 ways that you will make money

A beach house or condo has the potential to increase in price.  You could then sell it, and make a large profit in addition to all the rental income.  This would only work if you purchased the property for a low price, such as buying it in poor shape and renovating it to look new.  If it was a low price in the beginning, you improved it with renovations, and then sat on it for a while, you could potentially make a lot of money.  To make this work well, you should have the cash to purchase the house or condo initially.  Utilizing a loan would not be advisable, as it would mean payments each month on a mortgage.