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479 Bayview Walk, Ocean Beach

Is Your Beach House An Expense Or An Investment?

Many people spend their lives dreaming of owning a beach house, but instead of going for it, they assume it’s a luxury that’s out of reach. However, with Fire Island’s robust rental market, you might be surprised at the financial realities of owning a vacation home. Buying a beach house can give you the opportunity to earn significant income by renting out the home when you’re not using it. Most of the buyers we service see their purchases as both an asset they can enjoy with their family and friends, and as an investment that can produce rental income to defray the cost of ownership. Renting the home frequently gives the owner the opportunity to own the home at a substantially subsidized cost, with some properties actually carrying themselves.  Additionally, many people are under the misconception that mortgage financing is not available on Fire Island but that is not the case.  Mortgage financing, both for second homes and investment properties on Fire Island, is available through a wide variety of lenders.  No need to stockpile the entire purchase price in cash if you don’t want to.

Wondering what renting your beach house could look like for you? On Fire Island, weekly rentals range anywhere from $2,500-$16,000 per week depending on the property.  Owners who don’t block out any time for their personal use frequently earn approximately 12 times their peak weekly rate as an annual total.  For example, if your home rents for $5,000/week in July & August, you could expect to earn approximately $60,000/year in gross rentals for your home.  If you decided to use it for 2 peak summer weeks, then you can adjust your expected gross rental by $10,000.

While there is an active market for rentals from May to October, you’ll see the highest rents during the peak summer weeks, which corresponds to when kids are out of school, since that is when most families take their vacations.  Shoulder season rents are typically about half what a home commands during July & August.  Many homeowners choose to use their homes more during the shoulder seasons, (preferring the peace, quiet and lack of crowds) and rent them out during the peak for maximum rental income. While renting out their home the majority of the time is a great option for buyers looking at their home primarily as an investment, for those who prefer to use the home for the majority of the summer season, in many cases, renting just one or two summer weeks will cover your annual taxes and insurance.  Even if your primary objective is to purchase a home for your personal use, it’s nice to know that the asset you’re purchasing has the potential to generate significant income, just in case your circumstances might change in the future.

Some buyers love the idea of owning a vacation rental, but don’t have the necessary time to devote to it.  Full service rental management is available to handle all of the hassle for you, so you can still use the home when you want, and generate income when you want, all without any effort on your part.  At the end of the day, owning a vacation rental gives you the best of both worlds- income and personal enjoyment!