1. Hurricane And Flood Liability
Flood and hurricane insurance is often sold separately from general homeowner’s insurance. If, as was often the case following Hurricane Katrina, insurance brokers can’t determine if your home was destroyed by wind or water, and you lack one of those insurance policies, it’s likely you won’t be reimbursed. If you’re a condo buyer, make sure to find out whether or not your condo fees cover wind and flood damage.
(Luckily for Puerto Vallarta this area is not prone to hurricanes)
2. Changing Shorelines
Your mortgage is likely to last thirty years; shouldn’t your beach house? Beaches are victim to erosion and hurricanes. Spend some time researching information from your state’s geological survey to make sure your second home will remain on the good side of the shoreline.
(Good Advice and generally for the ocean front Condo complexes here it has already been contemplated)
3. Rental Market
It’s unlikely that you’ll spend more than one or two months a year in your beach home. Understanding the status of the local rental market is key to how much of a drag your beach home will be on your finances. If you’re looking at buying in a beach community dominated by overbuilding or foreclosure, as with many of the submarkets in South Florida, there is currently a glut of unsold homes which are being rented, and rental yields are down as a result. Not being able to rent your home ups the overall cost of the investment.
(Puerto Vallarta still has a good rental market especially with the influx of baby boomers, trying out the market, over the next 13 years)
4. Fringe Markets
A phenomenon seen during the boom in the urban market, but also in beach markets, was the rush to fringe markets with the idea that they were up-and-coming. Since the market has turned in both places, those fringe areas have depreciated quickly. We’re currently in a market where there are very few up-and-coming neighborhoods or beach communities in terms of appreciation, so you should be wary of any broker who promises you as much.
(No Fringe markets here.. we have been strong for almost 3 generations now)
5. Consider Overseas
It’s never a good idea to buy into the next speculative bubble, but if you’re looking for a hot sales market, consider areas in Mexico, like Los Cabos, that are undergoing real-estate booms. These properties will often give you a lot more space, closer access to beachfront and more amenities than what you can buy in established U.S. markets.
(Yes.. We Agree.)
6. Underwater Investor
Almost every beach community has investors, speculators and regular buyers in negative-equity situations. If you’re looking for a deal on a home (or want to know how low your low-ball offer can go) make sure to check the title and loan status of the home in question through the county assessor’s office. Keep in mind that a seller is unlikely to accept an offer too far below what he paid originally, unless he’s in extreme distress.
(There are opportunities in the market right now, though many people purchased with cash so they aren’t experiencing credit for their properties here)
7. Beachfront Is King
If you are looking for appreciation, homes located on the beach are much more likely to hold their value than a cheaper alternative in the same town or community that doesn’t have beachfront. There’s a much more limited quantity of beachfront property than there is property waiting to be developed in beach areas.
(Beach front properties are the easiest to sell)
Timothy Real Estate Group – An innovative company setting new standards in Real Estate sales and services has the most professional and experienced Realtors in the Puerto Vallarta area who understand the intricacies of Mexican Real Estate ownership, the local market, Puerto Vallarta property codes and regulations and financing. The Timothy Group uses that knowledge to provide a sound analysis on every aspect of property ownership. Timothy Real Estate Group is known for professionalism and experience and they bring this to every transaction they work on for the benefit of Real Estate investors and developers alike. Ask about our Real Estate Listings