For many people, picturing their dream home — maybe a two-story Cape Cod on the shores of a lake, or a small ranch overlooking the ocean — involves a stunning waterfront view. They dream of long summer days spent swimming, fishing, surfing, or just relaxing on the shore, all a short distance from their doorstep.
If you’re one of these people, you should be careful before taking the plunge into buying waterfront property. These properties come with a unique set of challenges you must prepare for. Here are six questions to ask yourself before buying any home on the water.
1. Do you need flood insurance?
Water is pretty to look at from the comfort of your front porch. It’s not quite as enjoyable when it’s swamping your basement or pouring into your backyard. Before you purchase that waterfront property, find out if your potential new home sits in a flood zone. And start investigating flood insurance.
Flood insurance, made available through the federal government’s National Flood Insurance Program, protects you if those lake or ocean waters flood your property. How much you’ll pay will vary, but you can expect to spend about $700 a year for this protection.
You might not like that extra expense. But a single flood can cause tens of thousands of dollars’ worth of damages to your home. (See also: Everything You Need to Know About Flood Insurance)
2. What can you build?
Part of the fun of owning waterfront property is, of course, enjoying all that water. You might want to build a pier, boathouse, or dock along your shoreline. Be aware, though, that many municipalities impose a list of regulations that homeowners must follow before building out into the water.
Before building that pier or dock, you’ll almost certainly need a permit. In some areas, you might not only have to follow regulations set up by the local municipality, but also rules from the county, state, or in the most heavily regulated areas, the U.S. Army Corps of Engineers.
Before plunking down your dollars to buy that lakefront or beach home, do your research on what you can and can’t build along your shoreline.
3. Are you responsible for maintaining a bulkhead?
Many waterfront properties are protected by a bulkhead, which is a barrier wall — often made out of rock and stones — that separates homes and property from the water. Depending on your community, the care of this bulkhead might be heavily regulated.
The rules in some areas will state that homeowners are responsible for maintaining their bulkheads. This can be pricey. Before buying your waterfront home, it makes sense to hire a specialist to inspect your bulkhead. A specialist can tell you if your bulkhead will need expensive repairs and how much it might cost you to maintain this barrier wall each year.
4. What improvements can you make?
Maybe you want to convert that waterfront ranch home into a two-story with expansive views of the water. You better make sure you can actually do this before buying it.
Many communities have strict restrictions on what improvements you can make to a waterfront home. You might not be able to build past a certain height, use certain building materials, or build as close to the shoreline as you might like. There are usually sound reasons for these restrictions. Other property owners, for instance, don’t want you to build a three-story home that would block their view of the lake or ocean.
Before you buy, make sure the dreams you have for your waterfront property are actually allowed.
5. What can you do on the water?
Local regulations can again play a role in what you’re allowed to do on the water. You might dream of zipping around on a jet ski, but local regulations might not allow these water vehicles on your lake. Maybe the lake isn’t clean enough to swim in, or the water isn’t deep enough for your boat. Don’t buy waterfront property only to learn that what you bought it for isn’t a possibility.
6. Will your new home be part of a homeowners’ association?
Many waterfront homes are part of homeowners’ associations, or HOAs. In an HOA, board members are elected to oversee a cluster or neighborhood of homes and impose certain restrictions.
These rules can severely curtail any changes you plan to make to your property. An HOA might vote, for instance, that you can’t use a certain color when painting your home, even if you think that color would be perfect for your property. An HOA might forbid certain types of plants outside homes in the association. They might even specify exactly how tall the grass can grow on your property. Don’t buy a home within an HOA if you’re not ready to abide by its rules.