Beachfront Bargain or Hidden Expenses: How Much Does a Beach House Cost?

How much does a beach house cost? This is a reasonable question for anyone who’s dreamed of sinking their toes in the sand and enjoying sunset walks on the beach. Unfortunately, there isn’t an easy way to answer without diving into cost considerations and intended uses. Find the perfect beach house at the right price by factoring specific expenses into your coastal escape.

Should You Buy a Beach House?

You can always count on real estate being a favorable investment opportunity — but a beach house? There are pros and cons to think about. For instance, many people choose to buy beach houses for the following reasons:

• Rental potential
• Vacation home
• Possible home value appreciation
• Tax benefits
• Better mental and physical health outcomes
• Recreational opportunities
• Sense of community
• Relaxing lifestyle

Understandably, many buyers may hesitate to buy a beach house in the current market. Although 2024 mortgage rates are down from last year’s 7.79% 30-year fixed rate, it’s still well over 6%, making it seemingly impossible to afford to purchase anything. Nevertheless, it is still a good idea if you can afford to buy a beach house as an investment property — especially if you plan to rent it out. 

Key Cost Factors of Purchasing a Beach House

You’ve decided a beach house is the right choice for you and your family — or perhaps you’re ready to make roots somewhere relaxing and laidback. At this point, you might ask yourself, “How much does a beach house cost?” Here are four cost factors to consider for the perfect seaside dwelling. 

Location

Location, location, location. If you’re interested in becoming a full-time resident of your beach house, you should concentrate on areas with fewer tourists. However, if you plan only to stay a few weeks and rent it out the rest of the year, the community must appeal to out-of-town visitors. 

According to a recent Architectural Digest survey, four North Carolina beaches ranked among the top 10 best places to buy a summer vacation home: Wilmington-area beaches, Kitty Hawk, Emerald Isle and Ocracoke. Others included Myrtle Beach, South Carolina, and Long Beach, California. 

Of course, these regions come with higher price points as populations flourish. In Florida — still a popular state in which to purchase beach houses — there’s been a 25% increase in home values in Jupiter, Daytona Beach, and Lauderhill. Of course, Sunny Isles Beach in Miami-Dade County maintains its white-hot market with a 106.4% appreciation. 

Property Type

Single-family homes will always be costlier than townhomes and condominiums, but the closer you are to the shore, the higher the price tag for all properties. Likewise, condominiums and townhomes will likely have homeowners association (HOA) fees for maintenance and amenities. 

Honolulu, Hawaii, has the highest HOA fees at $520 per month, accounting for 21.6% of total housing costs. Meanwhile, residents of Deltona, Daytona Beach and Ormond Beach, Florida, pay roughly $330 monthly. San Diego and Los Angeles also have similar median monthly HOAs. 

Square Footage

On average, a 1,500-square-foot beach house costs $450,000, while luxury residences top $1 million. Ultimately, it depends on the coastal region and materials used. 

Generally, a stilted beach house runs $250-$350 per square foot. These pilings raise beach houses about 10 feet off the ground, protecting them from storm surges and high tides — extremely beneficial if you live in Florida, the Gulf Coast, Georgia or the Carolinas. 

Quality Materials

Some building materials are more expensive than others, but you don’t want to skimp on durability and longevity with a beach house. Seaside dwellings receive ample wear and tear from tropical cyclones to salt air. 

Stucco, cement and cedar are more moisture-resistant than other siding materials, while metal roofs are much better at withstanding powerful winds, rain and debris. Composite decking, vinyl and fiberglass are other quality materials to ensure a safe structure. 

Of course, all of these materials have much higher upfront costs. Nevertheless, they’ll save you money in the long term by preventing expensive damages. 

Additional Beach House Expenses to Consider

The purchasing price is one of many expenses when determining the cost of a beach house. Additional factors like hefty homeowners insurance and maintenance fees must also be considered. Here’s a breakdown of both. 

Homeowners Insurance

Climate change could dampen your beach house dreams. By 2050, experts predict that $106 billion worth of coastal homes will fall below sea level and accrue damages from saltwater intrusion.

As a result, homeowners can expect 60% higher flood insurance premiums by 2040 — that is if they can find it. Precipitation from tropical storms will likely increase by 20%, while the U.S. may see more frequent “100-year floods” in and around rivers. However, many insurance companies have pulled out of states susceptible to flooding and natural disasters, which they claim mostly involve legalities and claims fraud.

Floridians had difficulty obtaining coverage in 2023, as the leading flood insurance companies left homeowners scrambling. Florida residents already pay the most for homeowners insurance premiums at an average of $6,000 annually — 42% higher than the average $1,700 across the rest of the U.S. 

Even with companies like Manatee Insurance Exchange, Orion180 and Ovation Home Insurance Exchange writing new policies for homeowners in 2024, rates will likely remain high. There is also the risk of these companies pulling out of Florida after the first major storm hits.

Maintenance

Due to environmental factors, beach house maintenance is much costlier than the 1% maintenance budget for a traditional home. Salt air and humidity form rust on doors, windows and outdoor equipment. Over time, moisture also turns to mold and mildew. 

Roof damage may cause water damage inside your home, too. Inspecting your home annually — or after every storm — is critical to finding and remedying damages from the onset. Otherwise, you could have bigger problems to contend with. 

Always budget for more maintenance when you own a beach house — it’s not uncommon for the unexpected to occur.

Beach Bliss on a Budget

Not all beach houses are out of reach when it comes to price. You can find a quaint coastal cottage at the right price if you do your homework. If you’ve always dreamed of owning a beach house, plenty of options exist to meet your needs.