Renting Is An Important Part of Investment In The Long Beach Island NJ Real Estate Market
Buying and Renting in the Long Beach Island Real Estate Market
For many, buying a home on Long Beach Island is a major financial investment. While the majority of the LBI real estate transactions that take place are for second homes and personal enjoyment, nearly every buyer is also thinking of their purchase as an investment. Renting and Investing In The LBI NJ Real Estate Market takes careful consideration and an understanding of the past, current and future state of the LBI real estate market including the risks and benefits that are involved in the process. A major distinguishing characteristic of Investing In The LBI NJ Real Estate Market involves the ability to rent a house as an income producing property during the busy summer months on LBI.
Renting and Investing In The LBI NJ Real Estate Market
If you are thinking of buying a house in the LBI real estate market as an investment, there are some important details you should be aware of when planning to rent the house out as a part of that investment. For example,
- Location matters!
- You must account for vacant weeks, cleaning fees, commissions and repairs
- Rental investment should be thought of as an extra source of income…not the primary means of paying for the property
The old adage, “location, location, location” is the key when renting a home on Long Beach Island. While homes rent in all locations on LBI, oceanfront, ocean block and oceanside properties are by far the most highly sought after. If you are looking at Investing In The LBI NJ Real Estate Market strictly for financial gain, it would be wise to consider these properties first as they will not only rent faster than bayside properties, they will also hold their value better during the ups and downs that naturally occur in any market. That being said, you will pay more for an oceanside, oceanblock or oceanfront home on Long Beach Island so you have to make sure the additional rent and appreciation are worth the extra cost. By no means should bayside properties be excluded when Investing In The LBI NJ Real Estate Market. Bayside homes will rent and will appreciate. They will simply do so at a slower pace than their oceanside counterparts.
When factoring rentals into your LBI real estate investment, it is important to consider the “unseen” costs in renting a home. There are the expects costs of a mortgage, taxes, etc. but there are additional fees that must be expected. For example, it is advisable to plan for a week or two that will remain vacant. While the odds are good (depending on the year) that you will be fully booked for the 10 week season, planning for the worst will help avoid stress should that not be the case. Regardless if you decide to rent your house through an agency or on your own, there will be an expense associated with marketing your property. Rental sites like VRBO and Homeaway will typically charge a flat fee of $300-$500 depending on the options you select whereas an agency will charge about 10%-12% of the rental amount for advertising and servicing the rental. Cleaning fees must also be accounted for and will vary depending on the size and condition of the house.
Lastly, when Renting and Investing In The LBI NJ Real Estate Market, you should think of the rental income as a bonus…not the sole means of funding the investment. Should the unexpected occur, for example a hurricane make landfall in the middle of the summer season and shut down the rental market, you should be able to afford the carrying costs of the property until the rental season can return. Rentals make for an excellent way to carry the property, but you should have some money set aside…just in case!
Buying a Home in the LBI NJ Real Estate Market
When looking to buy a home in the LBI NJ real estate market, it is important to understand all aspects of the area, the local real estate market and the options available to you. Renting and Investing In The LBI NJ Real Estate Market can be a fun and profitable experience but only when the right house is purchased at the right price! Location, condition and the final sales price must be carefully researched and understand to make the investment worthwhile!
For more information about Renting and Investing In The LBI NJ Real Estate Market feel free to contact me anytime and I will be happy to answer any questions you have!
Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | firstname.lastname@example.org
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