5 Costs To Be Aware Of When Purchasing A Lakefront Home
When it comes to purchasing a lakefront home, there are multiple expenses you need to be aware of. A lakefront home comes with a lot of costs beyond the purchase price of the home.
Cost #1: Property Cost
First, you need to consider the cost of the property. This is going to be the purchase price of the home. Generally, the cost of purchasing a home located on the water is going to cost more than if that same home was on a landlocked property.
Property that is located on water generally has a higher value than landlocked property. You are paying for the home and the property it is on.
Cost #2: Homeowner's Insurance
Second, you need to find out the cost of homeowner's insurance. With higher property costs, your homeowner's insurance may be more than the home you are in right now. Don't assume your homeowner's insurance costs will be the same; get a quote, so you know what you will be paying.
Cost #3: Flood Insurance
Third, you need to investigate the cost of flood insurance. You are more than likely going to be required to carry flood insurance on the property by your mortgage company. You are going to need to find out what flood insurance will cost you.
Flood insurance can be expensive, and it is a cost that you are going to have to pay every year, so you need to make sure this is something you can afford not just one time but every year.
Cost #4: Homeowner's Association
Fourth, you need to find out if your lakefront home is part of a homeowner's association. A homeowner's association has to be disclosed during the buying process.
Be sure to read over the homeowner's association rules and regulations, and how they structure their payments. This is a reoccurring payment that you are going to have to make each year you live in the home.
Cost #5: Maintenance Costs
Finally, you need to budget for the maintenance costs of a lakefront home. Your home may experience more wind being next to the water, which may require more care. You may also need to take care of the dock and extra outbuildings as well.
When looking at purchasing a lakefront home, you need to carefully consider what the real yearly cost will be. You will have to pay homeowner's insurance, flood insurance, homeowner's association costs, and maintenance fees on a yearly basis. If you can afford that cost, go through with the sale.
For more information, reach out to a real estate agent.