Real estate experts say that the best time to buy a lake house is anytime between the beginning of October and the end of December. Read more to find out how you can get a great deal on lakefront properties.
Many people have dreamt of owning a lake house. They want to wake up to the view of the beautiful sun rising over the water. And they want to spend the day fishing, swimming, and taking the boat out for a spin. However, the reason why they end up not buying lake property is because of the high costs that go with it. They need to deal with wear-and-tear expenses, higher insurance premiums, and possibly leasing the land where the lake house is on.
As a real estate investor, you can make this dream come true for them even if it is just for a weekend. While you will have to deal with the cost of living in a lake house, you can always factor those expenses into your rental fee.
In this article, you will learn all about lake houses, including:
- Why you should purchase a lakeside home as your next investment property
- The best time to buy a lake house
- How to find a waterfront property that you can invest in
- The best cities for lakeside properties
Related: What You Should Know about Investing in Lake House Rentals
Why Buy a Lake House as Your Next Investment Property
As real estate investors acquire properties and build their empires, eventually they will think of their next step. One day, they might ask themselves, “Should I buy a lake house?” If you can see yourself in this scenario, then this is your sign to take action.
Is Buying a Lake House a Good Investment?
Short answer: Yes, it is. That is one of the main reasons why people dream of having one. The relative scarcity of lake houses and the benefits they bring means that they would always be in high demand.
Many people purchase lakefront properties as their second home and as a rental home. Depending on the community, you can rent out your house for up to 180 days a year, provided that you make personal use of your home for more than 14 days each year or at least 10% of the days that you would have rented it out.
The reason why lake houses are popular is their proximity to the outdoors. Imagine seeing a lake right in your backyard. If that were your home situation, you would be more likely to spend time outdoors. People who live in lakeside communities tend to experience greater levels of peace and contentment. Even if you are just staying in your lake house for a few weeks every year, you will still benefit from the happiness that comes with living there.
So if you love water sports and are looking for a new property investment, buying a lake house is perfect for you. When you do buy a property by a lake, make sure to get your own kayak or stand-up paddleboard and take advantage of the beautiful water feature near your home. You can also take a boat out to the middle of the lake and start fishing.
If you wish to buy a lakeside property as an investment, you must first find out the best time to buy a lake house.
The Best Time to Buy a Lake House
The best time to buy a lake house does not follow the same pattern as buying standard homes, which see more new listings and closed transactions during spring and summer.
For lakeside homes, this is not necessarily the case. While demand for this type of house is also higher during the warmer months, you will face a lot of competition from other buyers who are willing to pay top dollar. Because of the high demand, more sellers tend to list their lake houses during this season as well, but they will have to compete with other homeowners in making a sale at the highest possible price.
If you see a lot of waterfront homes on the market at relatively low prices during this season, this could be a sign of a weak market. You still want to look into this deal, however. Just be more careful and thorough with your research to make sure that you would still earn rental income if you end up buying a lake cabin in that area.
Find Lower-Priced Properties by Buying Off-Season
The best time to buy a lake house, then, is during the fall and winter. While many sellers would take their home off the market and re-list it in the following spring, there are also those who are still trying to sell and would be more open to a quick closing. Because of the general sentiment of lake house sellers, you will see a lot of price drops in this season, which is perfect if you want to maximize your investment capital.
And because you will not have a lot of competition, you can take your time inspecting the neighborhood, the homes, and the culture outside of the busy season. The only disadvantage of shopping for a lakeside home during the colder months is that the environment is different. You might not see the area’s usual beauty when you visit in the dead of winter.
How to Find a Lake House That You Can Invest In
Now that you know the best time to buy a lake house, you can go find a lake house for your portfolio. And since you have to live in it some of the time, you might as well purchase one that you yourself would want to stay in. Thus, the first step should be for you to put together a wish list of features and amenities that you want to find in your dream lake house.
When going through the process of how to buy a lake house, here are some property features that you need to consider:
Qualities of an Ideal Lakefront Home
- The structure of the house must be able to withstand the challenges of climate change.
- The quality of the land where the house is on must be sustainable and made of sturdy soil that will not erode during bad weather conditions.
- The quality of the lake must be good for swimming, and the waterline must not be rising.
- You must love the view from your lake house. If you are visiting the property during fall or winter, ask for or research photos of the surrounding view during warmer seasons.
- The waterfront home must give you enough privacy from neighbors and non-residents who visit the area to enjoy the lake, which is usually designated as public land.
- The property and neighborhood that you choose must fit your lifestyle. For example, if you love to go boating, you would want to buy a home that has its own dock.
- You should know what kinds of insurance you must take out for your lake house. Different areas require different policies, which can add up to the cost.
- The residents themselves must love living there. You can find out if a lakeside area is worth investing in by talking to those who live there.
- Unless you want to invest in an off-grid lake cabin, the area must have access to basic utilities such as electricity, clean water, a septic system, and internet.
- You must know and accept your responsibilities as a lakeside homeowner. These include following the neighborhood’s HOA rules.
Lakeside homes with these qualities are more likely to increase in value over time. You should also put more importance on finding a good neighborhood before looking for a house. You can always fix the building to meet your needs, but you cannot move its location.
How to Find a Lakeside Property Online
Just like when purchasing a house, you can start your search by using an online platform like Mashvisor. Our Property Search allows you to look for lakeside rental homes in the US. You can narrow down your search by neighborhood, your budget, target rental income, desired cash-on-cash return, and more.
If you want to hire a real estate agent, find someone who is local to the area that you are looking at. Aside from their general expertise in lake houses, they are also familiar with the neighborhood and can use their insider knowledge to negotiate a great deal on your behalf.
When buying a lake house, you also need to think about your financing early on. These homes are more expensive than your regular residential property. So unless you have liquid capital and can pay in cash, you might want to get pre-qualified for a loan before even putting in your first offer.
Related: Rental Property Finder: A Revolutionary Tool for Investing in Real Estate
The 3 Best Towns to Buy a Lake House
The US has a lot of cities and towns with lakeside communities, so deciding on where to start looking can be overwhelming. To make things a little more convenient for you, you can start with these three towns. These three are big on tourists who go there to vacation for about one week, making them hotspots for investors looking to buy a rental home.
#1: Wolfeboro, NH
Wolfeboro is two hours drive from Boston and five hours from New York City. Its town center sits directly on Lake Winnipesaukee. Aside from the picturesque lake, the town boasts of its lively culture. You will find exciting restaurants and breweries in the area. It also does not fall short of water activities.
According to Mashvisor’s Property Analysis Report, home prices in Wolfeboro are around $500k with an average of $272 per square foot. Renting out your lake house here would earn you 3 to 5% cash-on-cash returns.
Unlike other towns, any time of the year is the best time to buy a lake house in Wolfeboro. During colder months, it becomes a skiing destination, so you can still expect tourists looking for houses to rent here during winter.
#2: Greensboro, GA
Located 85 miles out of Atlanta, you will find Greensboro on Lake Oconee, which Travel+Leisure describes as “one of the most charming lake destinations in the South.” It is home to a posh golf community, so you can charge a premium price in renting your lake house.
Prices of lakeside properties in Greensboro are around $597,000 with an average of $318 per square foot. You can enjoy 6% cash-on-cash returns if you put up your lake house as an Airbnb or short-term rental.
#3: Bayview, ID
Bayview is a floating village situated on Lake Pend Oreille and by the foothills of the Coeur d’Alene Mountains. It is one of the few lakeside communities where you will definitely get a house that is on a lake instead of one that is down the street from the water. It is also home to Farragut State Park. So if you love to hike as much as you love to swim, this is the best place to buy a lake house for yourself.
Homes in this area cost around $790,000 even with winter rates and sell for an average of $443 per square foot, but you can still find lake houses at lower price points. However, the cash-on-cash returns only range from 0.8 to 2%. Bayview is a hidden gem, so if you market your rental home and the town well, you might be able to earn more.
These are just a few of the lakeside towns and cities that attract a lot of tourists. If you want to do your own search, Mashvisor’s Property Finder has a heatmap that shows you the US geography including its lakes as well as the nearby properties that are for sale.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Your New Lake House Awaits
The best time to buy a lake house is during the last three months of the year when the tourists are scarce and the homeowners want to make a quick sale. So if you are looking for a new investment to add to your portfolio, consider buying a lakeside property.
But because lake houses require more maintenance compared to properties that are not near the water, you need to find one that will give you the bang for your buck. Surveying its neighborhood, its environment, and its structural integrity will help you avoid costly repairs later on.
When you are ready to purchase, use Mashvisor’s array of real estate tools to help you find your dream lakeside home. Start out your 7-day free trial with Mashvisor now