Flood insurance costs are rising overall in next year so that is a wildcard to throw in.

Even in a condo upper unit where you pay no flood insurance yourself directly there is an association policy that may be hit and slowly hit your condo fees.

Some places it might even go down! But most up.

But a wildcard. Called Risk 2.0 look it up

We bought a Condo in Rehoboth in May 2019. We rent it out year round but block out times for ourselves too. 2019 we only got short rentals because we bought late in the season, last year Covid so didn’t break even. This year we are finally breaking even. We decided this year to allow dogs ( we have two of our own) and this has helped with off season rentals like Oct and November. Spouse manages it all thru vrbo. It’s in The Tides community so about a mile from downtown Rehoboth. It’s a gated area with a lovely pool and also backs to the bike trail. We’ve had no problem getting renters this year.

Get ready for things like this, OP, and have fun!

https://www.dcurbanmom.com/jforum/posts/list/979271.page#top

Anonymous wrote:My parents bought a beach house to rent out (not in Rehoboth). I guess they are happy but I would never do it. You need to hire a management company and also spend time managing them. It is just constant repairs, checking on the maids, responding to reviews, fielding questions about whether people can bring dogs (manager wants them to say yes) and so on. Annoying to do from a distance.

There's also a tension between buying and maintaining a place you want to stay in, and buying and maintaining one that can suffer rental abuse. My parents bought a nice house and furnished it beautifully. People steal pillows, put chicken carcasses down the disposal, take wine glasses to the beach and lose them there, break off keys in the door. Yes there is a deposit but now you've got another family coming in and the disposal is broken. Plus people leave bad reviews if you take their deposit.

Honestly I'd rather just pay to rent when I want to go, especially if you're planning to go in the off season.

+1 from someone who's been there. You also left out that tenants have no respect for utilities and literally will open windows with the a/c blasting (a/c which by the way needs to be replaced more often than elsewhere because the salt air rusts the equipment). Bottom line: whatever expenses you're including in your calculations, double them and then some.

We ended up selling and just renting when we wanted to go to the beach. Besides, how much fun is it to own when you have to rent in the summer?

My parents bought a beach house to rent out (not in Rehoboth). I guess they are happy but I would never do it. You need to hire a management company and also spend time managing them. It is just constant repairs, checking on the maids, responding to reviews, fielding questions about whether people can bring dogs (manager wants them to say yes) and so on. Annoying to do from a distance.

There's also a tension between buying and maintaining a place you want to stay in, and buying and maintaining one that can suffer rental abuse. My parents bought a nice house and furnished it beautifully. People steal pillows, put chicken carcasses down the disposal, take wine glasses to the beach and lose them there, break off keys in the door. Yes there is a deposit but now you've got another family coming in and the disposal is broken. Plus people leave bad reviews if you take their deposit.

Honestly I'd rather just pay to rent when I want to go, especially if you're planning to go in the off season.

OP. we bought a Rehoboth condo in March, and are excited about. We understand that the market is somewhat crazy now, and that prices may decline or flatline. But we figured it is a risk worth taking because interest rates are so low.

Why buy now instead of waiting? Who knows what prices are going to do in the future. They might keep rising! Plus, interest rates are low. If prices decline but interest rates go up, the monthly payment on a cheaper place might still be no lower than our monthly payment now with a great interest rate. And we get to build equity and enjoy it now!

Like you, we are planning on renting it for part of the summer, and so far have had no problem finding tenants.

We looked for:

1. A place very close to the beach, even if that meant that we get less space for our money. We figured that being close to the beach will help it hold value, and help with renting it.
2. A place with no ground rent - ground rent is a waste of money and ultimately you could lose your property.
3. A place with a low condo fee - reduces costs, and means that we don't have to rent it as much to cover costs.

I don't view it as an investment - I know there are better things I could do with my money. But we like having it now, and are really looking forward to using it more and more as we move toward, and into, retirement.

OP, you sound like you're dreaming. My advice is not to buy a condo if you have to rent it out to pay for it. Summer rents won't cover the cost, and expenses will be higher than you think.

Anonymous wrote:I wouldn't waste an agent's time until you are 1-2 years from buying.

Agreed.

I wouldn't waste an agent's time until you are 1-2 years from buying.

OP here - another question I have for current owners is how soon should I get a real estate agent? I'm still 2-3 years out from buying, but would love a local agent's expertise. Just not sure how many are willing to work with someone who's not ready to buy for a few years.

We own in Scarborough Village, which is 4 blocks from the ocean but backs to the Avenue. We don't rent, but units that do are full all summer.

Agree that you'll be in a better position to buy in 2-3 years.

There is very little inventory now. Even in the secondary complexes that surround Route 1. Hard to believe. We were in the market before COVID but now plan to wait at least 2-3 years to see what happens with the market. I am hoping that people who bought their COVID vacation houses will tire of them in a few years.

Anonymous wrote:Beach house owner here. Market is really overheated, so you will surely overpay, which will translate to the rent you must charge to sustain the property. I’d wait. That said, being close to the beach does matter, yes.

Thank you! I still have quite a bit to save, so I can certainly wait for the market to cool. I was hoping for 2-3 years from now.

Beach house owner here. Market is really overheated, so you will surely overpay, which will translate to the rent you must charge to sustain the property. I’d wait. That said, being close to the beach does matter, yes.

We are seriously considering buying a beach home in Rehoboth. In order to afford it, we'd have to rent it out in the summer months, which we don't mind.

My questions are:

1. How important is it to buy close to the ocean? We need to rent it out, and I think the closer we are to Rehoboth Avenue, the better. That said, those places are very expensive. Buying a few miles away would be much more affordable, but do those units rent consistently in the summer months?

2. We are currently saving money for the 20% downpayment on the beach house. How much extra should you generally save for 2nd homes (I'm thinking of emergency repairs, etc)

3. Lastly, if anyone has a Rehoboth rental property - how do you like it? Is it easy to manage?

4. Any other advice for a first time vacation home buyer?