Investing In A Beachfront Property? Here Are Some Tips For You
India is a peninsula, a country surrounded by water on the three sides. Living near the beaches is an enticing offer for many investors and thus, makes waterfront cities perfect locations for real estate along with being the scenic beauty that these are. Cities like Chennai, Vizag, Mumbai, Goa, Pondicherry etc are exciting real estate locations where sea-facing and sea-side properties have attracted the attention of real estate investors as well as end-users to put in their money.
Buying a waterfront property is an expensive proposition, hence, here are few tips to make this costly investment right:
Rules and regulations
Real estate construction across shoreline is governed by Coastal Regulation Zone (CRZ) Norms. Each city has different CRZ norms and restrictions on construction. While there have been reports of encroachment on the coastlines by land sharks, properties built beyond the permissible limit of CRZ are considered as illegal. Hence, before shortlisting the property, check with local property consultant about the norms and legality of the home. Usually, CRZ II and III are allowed for construction activities with few restrictions on the type of construction.
Types of real estate cost associated
The operational cost of buying a beachside property is little more than the usual property. While the property tax remains the same, there might be a premium linked to the property for the view or for the neighbourhood. The upkeep and maintenance cost of the interiors because of an excess of moisture in the air, will be higher, too. Apart from this, if you are using this beachside property as your vacation home, there will be more utility charges as there are high chances of damage to interiors, iron artefacts, sanitaryware etc. if the property is kept unused for long.
Also read: Hong Kong Seaside Mansion Sold For $86 Mn
Right kind of location
Whether it is a vacation home or for investment purpose, real estate is a tangible asset with a price tag attach to it. It is necessary to understand the worth of the property and the location you are considering to buy in. Ask few questions before giving into it:
- Will the location still be attractive after 10 years?
- What will be the price growth in this area after five years?
- Will I be able to find a buyer for this property in next three years?
- Is the pricing apt for the location?
- Can I afford to maintain a beach-side property?
Though there is no good time to buy a trophy asset, beach-side properties are a little different and investor should study the market. Know whether there will be any potential buyers for the property in near future. Calculate returns through rental income as well as the capital value appreciation for mid-term. As waterfront properties remain popular for television and film shoots, you can also consider leasing out your property to a production house for consistent returns.
Natural disasters are unavoidable, but, it is essential to understand the geological importance of the location you are considering to buy. With recent mishaps in Chennai and Vizag, reports quoted unauthorised real estate construction to be one of the prime reasons for the destruction caused in the city. Real estate construction in extreme proximity to the shoreline is an intrusion into the natural boundaries created by nature. Therefore, check with the local civic body and met department to understand the geological risk of the area you are buying into.