The guide to investing in a seaside property
During the pandemic, we also saw multitudes of baby boomers and even younger people, mostly the Gen X opting for healthier lifestyles, dropping urban living in favor of a more laidback waterfront lifestyle.
The psychology of why humans are attracted to the beach is simple—it offers a healthy lifestyle that urban dwellers rarely experience. Studies show that residents in coastal communities enjoy better overall mental and physical health. The lifestyle is healthier because everything is within walking distance. For the most part, seaside living is outdoor living at its best—the beach, swimming, snorkeling and loads of enjoyable activities provide exercise, plenty of fresh salty air, freshest seafoods and healthy doses of sunshine.
The beach environment can also be invigorating. Scientific studies show that the boost from Vitamin D (ocean water) produces negative ions that naturally calms your nervous system, so you are bound to feel at ease. Relaxing in the sand, ocean views as far as you can see, breathtaking sunsets—who doesn’t love spending time at the beach?
If the description fits your family to a T, you might think about purchasing a property to do away with the hassles of looking for a beach rental.
Do your homework: Investing is both an art and science
One rule of real estate investing is to not give in to impulse or spur-of-the-moment buys.
Know which beach property is a good investment by doing your own due diligence. Understand the risks and rewards and make sure that the location of the property will meet your needs—whether it’s a place to invest or live in. When you have done your homework, it will give you the confidence to seriously consider taking the plunge.
Personally, buying a beach property has always been on my bucket list so I am sharing and enumerating a list of “must haves” or metrics you should consider before pushing ahead into your investment. It all boils down to location, safety, convenience, the brand behind the project and a compelling “reason to believe” in the location.” Below is a list of questions that can help you in your initial analysis:
Is the location safe? Is the whole community safe? What are the crime and safety reports saying?
Is the property part of a masterplanned or mixed-use community? Is it an eco-tourism development?
Is the developer reputable? Does it have a track record in developing resort communities?
Is the community friendly to all age groups especially for the baby boomers and future retirees?
Will there be medical and wellness facilities?
What is the quality of the beach? Is it still pristine?
Is the area rich in marine and wildlife ecosystems? Will the community embrace the environment?
Have you checked the natural geohazards e.g. active volcanoes, fault lines, trenches, path of typhoons? What about geohazards caused by human activity?
What’s the weather like throughout the year?
Is there an airport nearby? How is the road network from the airport to the property?
Is the property accessible by public transportation?
Is there a formal property management unit that will take care of the development?
Is it a tourist destination? What is the population like? Has it been certified as a Tourism Enterprise Zone (TEZ)?
Investing is still a financial decision
These questions and the answers will allow you to understand rental patterns, calculate your expected income and expenses, objectively evaluate potential beach properties for personal use or for large scale investment and make you work on your cash flow to amortize your investment.
Project milestones will also help time your decision to venture into a business that can generate passive income.
For those looking to diversify (rental, boutique hotel development, restaurant operations), it’s important to crunch some financial projections. For individuals and their families yearning to have quality of life, it is time to study and explore an early retirement package with your employer so you can pack up and move to the beach full time. For those who can’t live in the property year round, owning your own beach residence may still be part of your plan to make it your second home with a steady recurring income during months when you’re in Manila or anywhere in the world.
Buying the right beach property can bring an excellent return on investment, a steady recurring income stream and access to a world-class vacation destination.
I know of investor friends that purchased properties that they rent out during peak summer time starting in February to May, refurbish it during the slow months in June to August, and when the “ber” months kick in, rent them out again until January. It is this cycle that effectively lets them live in the property for free during the predictable non-peak season.