7 Things To Consider When Buying A Waterfront Property

Who does not want to buy a waterfront property? I heard my mum is always dreaming about waking up to stunning water views! Where she can enjoy her morning coffee on the dock!

And I bought it! I made her dream come true and bought a lovely waterfront property.

But from a business perspective, the journey was a huge eye-opener.

I realized that while these homes are beautiful, they are also serious financial assets that require a different strategy.

I’ve realized that I have to share what I learned to help other investors get it right!

So, yes, I have tips for buying waterfront property.

Having direct access to swimming, boating, or fishing is undeniably appealing and a huge driver for rental demand.

However, I’ve found that it involves unique considerations that go far beyond a typical real estate transaction when you plan to purchase a waterfront home.

From a business standpoint, these factors can make or break your long-term ROI.

So, read my guide before you fall in love with that lakeside cottage or oceanfront estate!

I’ve put together seven crucial things you need to consider to protect your capital and ensure your investment stays profitable.

What Are The Top 7 Things You Need To Know Before Buying Waterfront Property?

It is vital to look beyond the aesthetic appeal to ensure your investment remains a sanctuary rather than a source of stress.

Here are the top seven things you need to know before diving into waterfront real estate:

1. Understand The Type Of Waterfront You’re Buying

“Not all waterfront properties are created equal. There is a significant difference between owning a home on a calm lake, a rushing river, a tidal estuary, or the open ocean. Each body of water comes with its own lifestyle, maintenance demands, and risks,” 

says Florida Seawall Solutions, a waterfront property maintenance company that specializes in Seawall Construction in Florida.

I’ve seen this firsthand. My lakefront friends enjoy calm water and privacy, while those on the ocean get incredible views.

However, you might have to deal with saltwater eroding everything.

You have to watch for seasonal flooding, and bay homes often have strict rules on how you can use the water. This is especially true on river properties.

Now, if you are planning to buy a business property near the water, you have to be extra cautious!

You would not want to see the rising water destroying every inch of your business that you have worked so hard to build.

For me, when I knew exactly what type of waterfront I was buying? It was the foundation for every other decision I made.

2. Research Flood Zones And Insurance Costs

When I bought my place near the water, the biggest financial wake-up call was the flood risk!

I quickly learned that most of the waterfront homes are not just near the water! They sit near the flood zones!

This means that the standard homeowner policies will not be enough for this! You would also need to carry a separate flood insurance policy.

The overall cost really surprised me! These premiums can add thousands of dollars to your yearly bill. And this solely depends on the zone.

So, my best tip? Do not just wait until you are at the closing table to figure this out!

Secondly, I highly recommend that you check the property’s FEMA flood zone designation. 

You must also get an actual insurance quote as soon as you start getting serious about the house.

For me, it was all about knowing the true monthly cost. I didn’t want a “dream home” that I couldn’t actually afford once the extra insurance kicked in.

Getting those numbers early saved me a lot of stress.

3. Inspect The Shoreline And Water Access Carefully

When you buy a home like this, you need to treat the waterfront itself as a separate building that needs its own expert inspection.

I have learnt this the hard way!

The erosion is a huge deal! Even for the business properties, when you are looking at properties near the ocean or a lake with changing water levels.

I have seen this firsthand! Over time, the erosion can literally pull the ground out from under you!

It can ruin your foundation and further wash away your beautiful landscaping.

When I was shopping, I made it a point to hire an inspector who understands the specific challenges of coastal property.

You really need a pro to get eyes on the seawalls, bulkheads, retaining walls, docks, and piers.

4. Know Your Riparian And Water Rights

When I closed on my property, I was shocked by how complicated water rights actually are!

In this process, I learned that just because I am next to water does not mean I own everything right up to the edge.

These are known as the riparian rights. These change depending on your state or the county laws.

In my case, I had to check whether I owned the land to the water’s edge or whether there was a public access easement. This can help people to walk along my shoreline.

I have also seen neighbors get hit with surprise restrictions on building docks or using motorized boats.

So, if you ask me for the best tips to buy a waterfront property?

I would recommend that you hire a real estate attorney who knows local water laws before you sign anything.

I did this to make sure I knew exactly what I was legally allowed to do.

From a business standpoint, knowing these rights is vital. If you can’t build a dock, the resale value or rental appeal of your investment could drop significantly.

5. Factor In Elevated Maintenance Costs

Waterfront living is beautiful, but it comes at a price. When I bought the property, I realised that the price extends well beyond the purchase tag.

Properties near water come with far more environmental stress than inland homes.

Salt air, humidity, wind, and moisture: these are the three factors that accelerate the deterioration of virtually every construction material.

You can also expect to spend more on

• Exterior paint,
• Foofing,
• Windows,
• Mechanical systems.

For me, I also ensured that I am sealing the wood decks and docks properly, or replacing them when it is time.

HVAC systems in coastal environments tend to have shorter lifespans.

If you ask me, I would say that budgeting for these elevated maintenance costs upfront will prevent financial stress down the road.

This is one of the valuable tips for buying waterfront property.

It helped me enjoy your waterfront lifestyle without constant unexpected expenses eating into your budget.

If you can successfully factor these higher upkeep costs into your business model, it can protect your ROI and keep your investment profitable and stress-free.

6. Evaluate Environmental Regulations And Building Restrictions

As an investor, I have learned that waterfront properties are often subject to strict environmental regulations.

This creates an opportunity to protect the local ecosystems.

These are not just suggestions. There are legal limits on what I can build, modify, or even plant.

Now, most coastal or lakefront assets fall under the jurisdiction of local or federal agencies.

This means I might face restrictions on

• Clearing vegetation or
• Addling structures like boathouses and decks.

I always verify whether my expansion plans are actually permissible before committing capital.

Discovering that a renovation vision is prohibited after closing isn’t just disappointing.

As tips to buy waterfront property, I would tell you that it’s financially damaging to the property’s potential ROI.

7. Consider The Long-Term Impact Of Climate Change

This consideration is becoming increasingly difficult to ignore. Climate change is having a measurable and growing impact on waterfront properties across the country.

I had to look past the views and face a tough reality: climate risk, when I bought my place.

Some desirable markets today may face massive challenges in 20 years, when I bought my place.

I made sure to research long-term projections because ignoring them is a major risk to ROI.

From a business perspective, this is about protecting your capital. Properties in high-risk zones can become “stranded assets”.

This is nearly impossible to sell or insure as threats escalate, so you must follow the tips to buy waterfront property.

So, you need to understand that climate resilience is essential due diligence to ensure your investment remains a profitable, long-term asset rather than a liability.

Final Thoughts!

After buying my waterfront property, I have realised that it is one of the most rewarding moves I could ever make.

However, it made me realise that this is not just a purchase I can jump into. I understood that the process comes with a whole new set of rules!

It is nothing if you compare it to what you experience when buying a house in the suburbs.

Thus, I would like you to do the homework on the following things (and yes, follow the tips to buy waterfront property that I have shared):

1. Insurance and safety: You need to check if you can actually afford the insurance. Moreover, you really need to get a real sense of the climate risk.
2. The land itself: You have to take a look at the shoreline. For instance, is it stable? Is erosion going to be the constant opponent?
3. The fine print: You need to know exactly what your water rights are! I would also suggest that you check if there are any strict environmental laws or the coastal regulation zone rules!

If you fail to understand any of these, it might stop you from buying or building anything.

So, if you ask for the best advice? Well, I will suggest you build a solid team! You just need to hire a real estate agent who truly knows the water.

You would also need to hire an inspector who can spot all the issues. Lastly, you need to include an attorney who understands local legalities.

Before I finish writing this blog, I just want to tell you one final thing: always check everything is in alignment before you sign the papers!