Investing in real estate can be a smart financial decision that offers numerous benefits, including potential long-term appreciation, passive income, and tax benefits. Real estate has been a solid investment choice for generations and continues to provide investors with a secure and profitable return on their investment.
Waterfront properties have long been sought after by individuals looking to invest in real estate. With the stunning views and serene environment they offer, it is no surprise that waterfront properties are considered a valuable investment. This article will examine the four major benefits of investing in waterfront properties.
1. Appreciation in Property Value
Waterfront properties, especially in desirable locations such as Longboat Key, are often in high demand and can command a premium price.
One of the most significant benefits of investing in waterfront properties is the potential for appreciation in property value. Properties near bodies of water are often more valuable than those in other areas due to their unique views and lifestyle. Additionally, as the demand for waterfront properties continues to grow, their value will likely continue to increase.
According to REDFIN (Source: REDFIN), the average Longboat Key home is $1M, down 3.1% from last year but 24.9% year over year. The average sale price per square foot is $645, up 11.8% since last year. Homes in Longboat Key will sell on average after 14 days on the market.
2. Potential Rental Income
Waterfront properties are highly sought after by individuals looking for vacation or rental property. With this high demand, owners of waterfront properties can expect to generate substantial rental income. This can be incredibly lucrative for those who own a property in a popular vacation destination. By renting out the property, you can not only cover the cost of ownership but also generate a profit.
According to Steve Walter of Walter Group Real Estate, although Longboat Key Town ordinances do not allow short-term rentals (with limited exceptions), 1-month rentals 12x/yr rentals are permitted in many neighborhoods. The benefit is that Longboat Key still enjoys the ‘locals’ atmosphere from having fewer transient visitors. For owners that would like to take advantage of additional rental income when they’re not occupying their properties, the long-term rentals are often easier to administer and don’t subject the property to wear-and-tear that comes with short-term rentals.
It is a good idea to work with a local real estate agent who has expertise in this market and can help you navigate the buying process.
3. Quality of Life
Owning a waterfront property can provide a unique quality of life that is difficult to replicate in other properties. The peaceful surroundings, breathtaking views, and easy access to water-based recreational activities make waterfront properties desirable places to live. This provides an enjoyable environment for the property owner and makes the property more attractive to potential renters.
Longboat Key, Florida, is known for its high quality of life, making it a popular destination for retirees, second-home buyers, and families.
- Beautiful beaches: Longboat Key is situated along the Gulf of Mexico, providing access to some of the most beautiful beaches in Florida.
- Vibrant cultural scene: The area is home to numerous art galleries, theaters, and museums, as well as several annual cultural events, such as the Longboat Key Arts Festival.
- Abundant recreation: There are plenty of opportunities for outdoor activities in Longboat Key, including boating, fishing, tennis, golf, and more.
- Proximity to major cities: Longboat Key is located near several major cities, including Sarasota and Tampa, making it easy to access additional amenities and attractions.
- High-end dining and shopping: The Longboat Key is home to various upscale restaurants and shops, offering everything from gourmet cuisine to high-end fashion.
4. Tax Benefits
Real estate investment can also provide several tax benefits, including deductions for mortgage interest, property taxes, and depreciation. These deductions can significantly reduce your tax liability, leaving more money in your pocket. In addition, if you sell the property for a profit, the gain may be taxed at a lower capital gains rate, which can result in a lower tax bill.
5. Diversification
Investing in real estate can also help diversify your portfolio, which is a critical component of successful investing. Investing in real estate can spread your risk across different types of assets, which can help protect your portfolio from market downturns and other economic troubles. This diversification can also help ensure that your portfolio is well-balanced and well-positioned for long-term growth.
Is Investing in Waterfront Property a Good Investment?
In conclusion, investing in waterfront properties, especially in Longboat Key, Florida, offers a range of benefits, including appreciation in property value, potential rental income, and improved quality of life. Waterfront property is an excellent choice whether you’re looking for a place to call home or an investment opportunity.
But there are risks with investing in waterfront properties. Longboat Key does reside on the southwest coast of Florida and has the potential for tropical storms and hurricanes. There are also strict zoning and regulations waterfront properties are subjected to and overall market volatility. You never want to be the last person in before a market correction.
Whether you’re looking to invest in a property for personal or financial reasons, waterfront properties are an excellent choice, but always consult your local real estate agent before making a decision.
About the Authors
Janet Walter and Steve Walter, Michael Saunders & Company Top Longboat Key Realtors have been Longboat Key residents for 20 years and experts in the Longboat Key and surrounding area real estate market. They have been the Top Team in Sales Volume on Longboat Key for Michael Saunders & Company for the last several years.
After graduating from Denison University in Granville, Ohio, Janet relocated to Sarasota to take a position with Heitman Retail Properties as Marketing Director. Janet has worked in real estate for over 25 years.
Steve began in enterprise technology sales. This experience has enabled the Walter Group to leverage sophisticated digital marketing strategies that put the property in front of the right buyer at the right time.