Best North San Diego Homes

Why You Should Buy a Second Home | Creative Ways to Buy a 2nd Home | Beach Houses

Why You Should Buy a Second Home

beautiful sunset over the beach buy a second home

In the following article we will discuss these important issues about purchasing a second home: 

  • Creative Ways to Buy a Second Home at the Beach

  • Reasons to Buy a Second Home

  • Can I buy a second home?

  • Buying a Beach House as a Second Home 

  • Creative Ways of Buying a Beach House to Rent Out

  • Learning about Rental Restrictions to Optimize Income 

  • How to Create Income With ADU’s

Creative Ways to Buy a Second Home at the Beach

I will be focusing my numbers and information in the Southern California area. Specifically in buying a beach house in the cities of Oceanside or Carlsbad which is the market I have worked in for over 30 years. However, the main ideas and concepts could be used in any area especially with the explosion of sites like airbnb and VRBO

People that live in southern California have found out why so many people travel here as a destination. These two communities are little diamonds in the rough that have become wonderful destinations to enjoy a few days as a quick getaway or a week or two to fully relax.

Reasons to Buy a Second Home

With interest rates at historical lows you can qualify to buy a second home at or under 3% interest rates with as little as 20% down. The main consideration is that you must live in the property 1 month out of the year and the property must be 50 miles away from your primary residence. 

There are many advantages when you buy a second home. Depending on your financial situation the interest and tax write off could be very beneficial especially if your home is paid off and your income is high.

Owning a second home causes most of my clients to take more time off to appreciate their second home and be away from the normal pressures of life. Especially, buying a beach house is a relaxing way to park your car and just walk or bike to everything.

In both Oceanside and Carlsbad most things by the beach are within walking distance to restaurants, coffee shops, shopping, microbrewers and outdoor activities. Both areas are very pet friendly and walking or biking is the easiest way to get around.

If you are staying at hotels, VRBO’s or even timeshares then you’re paying for someone else’s mortgage. You aren’t getting any appreciation or tax benefits on the rentals and historically timeshares don’t do very well on the resale market and they have annual holding costs..  

Can I buy a second home?

The short answer is definitely yes! With the travel restrictions created due to coronavirus many locals in the area have started doing staycations and enjoying what so many people from the Midwest and East Coast come here to appreciate. Also, people living as far away as Las Vegas have flocked to these two beach communities as a way to escape the heat and enjoy a driving vacation.

When you factor in the high need for weekly and even monthly furnished rentals your ability to buy a second home becomes increasingly easier. Buying a beach house to rent out on a short term basis to assist in your monthly payments can be one reason to buy a second home. In this area we have many different people coming to enjoy our climate. 

If you wanted to live in your second home 6 months out of the year and rent it out to say “snowbirds” from colder regions that in itself would generate enough in rents to probably pay for your annual taxes and homeowner fees for the year.

If you need more income from your property then let me explain some more creative ways to buy a second home at the beach! Here are the key points for buying a beach house to rent out.

What are the rental restrictions on the property?

Most properties on the sand, across the street from the beach or within a couple blocks have minimum rental periods of 30 days. That is if they have a homeowners association (HOA’s). This limits your income potential during the high time of the year (approximately 8 weeks during the summer). 

Monthly rentals for a 2 bedroom 2 bath condo on the sand or across the street during the high times could be $7,000 to $14,000 depending on the size and location. That same property for long term rentals during the low times could be $3,000 to $6,000.


Finding the less restricted properties to maximize income! 

There are a few properties that have HOA’s that allow weekly minimum rentals and some goldmine properties that have only a 2 day minimum. These are the premium properties if you need more assistance with your payments and in some cases you can generate enough income annually to pay for your entire holding costs for the year.

Weekly rentals during the high times can range from $3,000 to $7,000, again depending on the size (which can equate to more sleeping arrangements- Bunk beds in second bedroom, Murphy beds, couches that convert to queen beds, etc.). During low to medium times these properties can still generate $1500 to $3500 per week.

The “goldmine” properties with 2 day minimums or no minimums can fetch $500 to $1500 per night if your on the sand or very close as a family can splurge for that chance to stay on beach or a group of 3 or 4 friends will pitch in for a great time at the beach. It all depends on how much you are willing to work at creating minimum vacancy.

One property that recently sold on the sand was creating over $100,000 in annual income and was rented out approximately 70% of the year….that leaves many weeks for your use to continue to qualify for the one month per year second home requirements.

A few blocks to the beach?

There is also the possibility of finding a small older home on a larger lot that is fairly close to the beach. Currently in North San Diego County the lack of housing has created ways to place what is called as an Additional Dwelling Unit (ADU) on your property with minimum restrictions and less permit fees than in previous years.

Up to a 1200 square foot detached ADU can be placed on a property which could be a 3 bedroom 2 bath home along with the little 2 bedroom 2 bath home that was originally built. You can go to my link on ADU’s here, to show you costs on placing an ADU on your property. There are other ways to do this that are cheaper if you would like to explore that contact me here.

With this option you can utilize either of the units as your second home. Rent it out for part of the time but create constant income from the other unit to assist in paying for your entire property!

So, “Can I buy a second home at the beach?” YES!

Everything depends on how much help you need to assist in your monthly payments and how much you’re willing to work for this property. If you work diligently at this task and create enough income then this property could pay for itself.

What if you want to buy a second home in another area of the country?

Don’t hesitate to contact me here. I have been in the real estate business for over 30 years and have a vast network of agents across the country that have the skills to assist you in the same way I would. If you have any questions or would like to discuss your options to buy a second home please contact me today.



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