What to Know Before Investing in Waterfront Property

Living right on the water can seem like a dream come true for many prospective property buyers. However, the reality of owning waterfront property can often be much different than what people expect. There’s no doubt that owning one of these real estate gems is unbelievably rewarding, providing homeowners with a unique experience unlike any other, but understanding what you’re getting yourself into before you sign your name on the dotted line is a must. Take a look at these critical factors that anyone looking into purchasing waterfront property needs to consider. 

Look at More than Just the Building

If you don’t have experience purchasing homes on the water, it’s easy to find yourself instantly falling in love with the views and the idea of wandering down to the water on those warmer days. Match those views with a stunning home that will fit you and your family perfectly, and you might just feel like you’ve found a match made in heaven. However, looking at every aspect of the property will be essential when viewing waterfront real estate. This means that the property grounds will be just as important as every other aspect. Suppose you walk outside and find yourself sinking into the mud as you walk towards the water, or there’s a steep climb down to the shore. In that case, you need to question how much of an investment you’ll need to put into the property before it’s completely comfortable or even safe for you to enjoy. Remember, you can change the style of a house, and you can add additional amenities, but you can never change the layout of the property you buy. 

Head the Inspectors Warnings

Even when you think you’ve found the ideal home, making sure you take everything an inspector says into consideration is an absolute must. According to Ocean Home

“Waterfront properties are less sheltered than those further inland, so rain and driving winds off the ocean will do more damage than you might expect, battering homes and creating a need for frequent maintenance.” 

While the water might seem like a beautiful site that gives your home that extra something special, it can be one of the most destructive forces for a building to withstand. Your inspector will be able to tell you what sort of challenges you could face through the years, including basement flooding due to high water tables, corrosion from saltwater air, mildew issues resulting from high humidity levels, and an array of other challenges facing waterfront properties. While you may find yourself fully equipped to handle these issues, understanding what you’re getting into must be at the top of your list. 

Look Out for Hidden Costs

When it comes to purchasing waterfront real estate, prospective buyers have to remember that there may be a number of hidden costs that come along with the property. For example, you may find yourself in a situation where you buy the house but lease the land it’s built on.

While you might worry that this will be complicated, it’s all very straightforward. Often when dealing with waterfront properties, the municipality or federal government will be the owner of the water and the shoreline on which your home is built. This means that while you’ll be the house’s legal owner, you will need to pay a leasing fee—usually defined in extended contracts that can last anywhere from 20 to 100 years. While the paperwork is relatively simple, you need to keep in mind this will be an added expense you otherwise wouldn’t have to consider.

You’ll also need to take homeowners insurance into consideration. Due mainly to the greater possibility for damage with waterfront real estate, homeowners insurance tends to be significantly higher.  But, believe it or not, this isn’t due to water damage. According to Coastal Insurance

“Even homes that are several miles from [...] shorelines could experience increased winds and greater risk of damage during a hurricane, nor’easter, or another storm.”  

Homeowner’s insurance on waterfront homes is often higher because of wind concerns. And this isn’t the only expenditure you need to consider. Buyers looking to live on waterfront properties need to take out a separate flood insurance policy altogether.    

Take a Look at Utilities

If you’re coming from an urban, more densely populated area, it might surprise you to learn that many waterfront properties lack basic utilities that most inland homeowners take for granted. This means when you start looking at these properties, you need to check for clean water supplies, electricity, septic systems, garbage disposal, and even cable and internet access. If your parcel doesn’t already have these utilities installed, it can be pretty pricey to get them out to these often more remote areas. Check with neighbors and local service providers to see what kind of deals might be available to you. 

Know Your Responsibilities

Living on a waterfront property comes with various concerns that may seem odd to anyone relatively new to the experience. There are several responsibilities which you will need to care for on an annual and sometimes monthly basis. These tasks might include:

  • Dock maintenance 
  • HOA requirements 
  • Local covenants and restrictions 
  • Bulkhead maintenance 

Make sure you and your agent find out precisely what would be expected of you after you purchase the property so that you’re better equipped to handle any challenges that head your way in the future. 


Get Started on the Loan

If you know that you’ll need a mortgage to afford your waterfront property, it’s best to get that situation sorted ahead of time. Waterfront properties are considered much more hefty investments than a traditional home and fall into a higher mortgage level. Because of this, lenders often only consider exceptionally qualified candidates, and they can take significantly longer to determine your approval.

This means you’ll want to get this factor squared away before you even start looking at properties. Also, make sure you have a fantastic credit score before you even head into the office if you want to be considered for such a large loan. Here are a few tips from Experian that can help get your credit score where it needs to be.  

The Supply and Demand Factor

Prospective waterfront buyers need to consider the local supply and demand, especially if you’re getting into this market as an investment. If the property is priced at an astronomical amount, how many other waterfront homes are there in the area? If this is one of the very few homes, it could potentially mean you’ll be able to see an even higher listing price in the future.

However, if this is a highly-populated area with numerous waterfront properties, all valued at less than what you might consider reasonable, it could mean this is a failing market. While you might want to get your hands on this lowballed gem at the moment, it might not be the most financially sound decision in the long run—as there may be various issues with the area that neither you nor your agent is aware of. 

What Are You Really Looking For?

When people decide to purchase waterfront properties, there could be any number of reasons why. Do you love feeling a saltwater breeze when you wake up in the morning? Do you find it peaceful to watch storms roll in off the ocean? Do you love taking a quick dip before you head into work? Every piece of waterfront real estate will have its own advantages and luxuries, but it’s up to you to determine whether or not they fit your personal lifestyle. Choose a property that goes along with your passions and expectations so that you don’t find yourself being let down later on. 

Can the Structure Take the Weather?

Whenever you look to buy any type of home, ensuring the proper care and maintenance has been put into it over the years is an essential first step. This is doubly true for waterfront properties. These homes can take a beating, so make sure the extra care has been taken to ensure these homes have what they need to withstand the worst the elements can throw their way. Things you’ll want to look for might include:

  • Storm Shutters Stainless 
  • Steal Locks 
  • New Outdoor Lighting
  • Renovated Docks 

Choosing to invest in a waterfront property can be extremely nerve-wracking, but often it’s well worth working through the challenge. These homes can often provide homeowners with the best years of their lives. If you’re looking for world-class waterfront real estate that will be worth your investment, The Waterfront Group today.



The Waterfront Group was a natural decision to form. This blended the waterfront lifestyle that Patrick lives to the marketing knowledge and experience he has gained in the industry. The Waterfront Group now serves those looking to buy or sell waterfront across the region with a trusted advisor and marketing expert.