If the idea of owning a beach house on the Jersey Shore attracts your attention, you’re in good company. Census data from 2010 shows that roughly six percent of American households own a second home, mostly within a 150-mile drive of their primary residence. According to NJ.com, the Ocean City metro area has a larger share of vacation homes than anywhere else in the country.
Start with a Plan
Having a plan before you begin to buy a Jersey Shore vacation home is critical. There are factors to consider and questions to answer that will lead you to make informed decisions. It’s worth taking the time to do the research and gain the knowledge you need to ultimately enjoy all the joy and satisfaction that a dream beach house represents.
Seek Clarity Before You Begin Your Search
Being clear on why you are making this large investment and what you expect from it is crucial. How will you use your second home? Purely as a vacation home for you and your family? A long-term investment rental property? Or your eventual full-time home in retirement? While there is overlap, your choice of each of these options will lead you to different results.
Your decision on the above questions may determine whether to look at condos versus single-family homes. A condo building simplifies the “lock and leave” concept. Some come with rental management and advertising promotion included in the purchase that may also provide on-premises maintenance and repair services. Condos also come with additional fees, rental restrictions, and pet policies that you must consider.
Single-family homes give you more freedom to do as you wish, often offer more space and less close contact with neighbors. The price of standalone units is likely higher, and you’re the one planning for maintenance, repairs, and managing the rental property or hiring a service to do it for you.
Your choices will also affect your financing. Your interest rate on a second home is less than on a rental property. A second home has a lower tax rate than a rental. It’s essential to document your time in the unit for these reasons, as is working out a plan to adhere to state and federal tax rules.
In addition to figuring your mortgage, property taxes, and routine and unexpected maintenance, you must factor these costs into owning a Jersey Shore vacation home:
- Utilities
- Property management fees
- HOA and condo association fees
- Furnishings
- Travel costs
- Insurance
Jersey Shore Vacation Home Coverage
When it comes to seasonal and vacation home insurance, there is much to know and sound decisions to make that properly insure your Jersey Shore vacation home at reasonable rates. To start, should you rent your beach house once or twice a year for a week or two, it may be considered a rental property that may require specialized coverage. You have possible liability exposure for injuries to renters and visitors and damages relating to their use of your property.
Additional Concerns Related to Jersey Shore Vacation Home Coverage
The second home location and its distance to shore and ocean tidal water will impact insurance price and the property’s insurance deductible. Additional coverage for Flood or Wind damage may be necessary or required by your lender.
Factors regarding the property, including its age, size, and quality, including construction materials, determine insurance prices. Other factors include whether the seasonal home, a stand-alone building or a unit in a condominium complex affect the price. In the case of a condo association, it’s critical to know it has adequate Loss Assessment insurance to cover losses occurring in a common area (pool, lobby, rec room) and what is not entirely covered by the association’s master policy. Older and poorly built homes are potentially more expensive to repair, which is an insurable price consideration.
Size Matters
Besides quality, the size of your beach house drives coastal home insurance premiums. The combination of your vacation dwelling’s square footage and its construction quality determines the replacement cost and price of your Jersey Shore vacation home coverage.
Lower occupancy rates increase liabilities and affect your Jersey Shore vacation home coverage. That’s because properties left vacant or unattended for extended periods have a higher risk of burglary and trespassers who can sue the property owner for injuries occurring on the property despite their illegal activity.
Our mission at Dickstein Agency is to take away your worries and give you the peace of mind that comes from knowing your dream home away from home is safeguarded against the loss and liability perils from unexpected events. Our professional staff loves the vacation at the shore experience. They bring their knowledgeable years of dedication to helping our clients get comprehensive Jersey Shore vacation home coverage at competitive prices.
About Dickstein Associates Agency
Dickstein Associates Agency has distinguished itself as a leading provider of personal and business insurance in the tri-state area for over 55 years. We pride ourselves on being advocates for our clients and providing them with quality and affordable coverages. As an independent insurance agency, we partner with various carriers, allowing for flexible and unbiased coverage for each client’s unique circumstances. For more information on how you can leverage all of your insurance to work best for you, and how we can secure the best insurance in the marketplace based on your specific needs, contact us today at (800) 862-6662.
