Oceanfront Property in Baja: Finding the Right Home
Do you find yourself dreaming of waking up to the sound of waves slowly rolling in outside your window, the smell of salt in the air, and the cool ocean breeze on your face while you sip your first cup of coffee? There are few among us who haven’t thought about living this dream by investing in some oceanfront property either in the Baja Peninsula or beyond.
Oceanfront property is valuable. In fact, Zillow estimates that waterfront homes are worth more than double the value of their non-waterfront counterparts. However, there are some precautions and considerations that investors and potential buyers must be careful of when purchasing a shoreline home.
Before investing in any oceanfront property, consider these tips that will help you identify a solid investment over one that will lose value over time.
To help your investment retain its value, look for homes constructed with materials that can stand up to salt, wind, and sand. Siding made of cement, wood, or stone holds up to oceanfront conditions better than their cheaper alternatives and is easier to repair in a few places without having to replace an entire wall or edifice.
Roofing made of clay, slate or finished wood shingles lasts longer than asphalt or metal roofing along shorelines. While they may reduce prices in the initial investment, replacing them will be expensive.
Floors made of oak, concrete or reclaimed hardwood will hold up best to sand and saltwater that will inevitably be tracked in from the beach.
Look for properties with slightly raised elevations (which have better long-term value) and take the time to investigate geological reports for the area you are interested in. In addition, keep your eye out for flood-prone areas and try to avoid them.
Rising sea levels may seem like a small issue now, but if you plan on having your Baja dream home for the next 50 years, then elevation may become a factor to consider.
Having attractions like parks, towns, marinas, and shops close to your oceanfront property will help retain the resale value and make it a more attractive choice to potential buyers should you ever decide to sell your property.
A private community in Baja is a great choice, but make sure to look for a community with amenities outside of the gate that is close at hand. Here are a few things that should be on your amenities checklist:
- Parks and community spaces
- Towns with established markets, restaurants, and shopping
- A close “downtown” experience
- Public transit
- Fire stations and hospitals
Trees are also an overlooked asset that builds community value. The University of Washington’s College of the Environment even estimates that the presence of larger trees can increase neighborhood value by 3% to 15%.
Besides not wanting to swim at a beach that is polluted, studies have shown that poor water quality has an impact on home value. According to one study from the U.S. state of Maine, water quality accounted for up to 15% of a lakefront home’s value.
Simply put, homes near polluted waterfronts are less valuable. Before you purchase a home in any of the beautiful Baja cities, you should take a look at the surrounding water quality as a whole, and not just what it looks like in front of your potential property.
Rain also has an impact on ocean water quality. Make sure to check the region for any major sewage outflows, faulty retention ponds, and river deltas. Ocean quality reports in many countries are sometimes hard to come by, but luckily for investors in the Baja region, there are several initiatives to protect and improve Baja Mexico water quality in the EPA’s Border 2020 program.
Erosion-Prone Areas: Erosion is a normal part of any coastline. However, some areas of shoreline are more prone to erosion than others. Be mindful of the factors that lead to erosion when choosing a shoreline community.
Speculative Booms: Buying into a speculative bubble is a dangerous game, but if you are looking to invest in a real estate boom consider buying outside of the United States. Areas like Cabo San Lucas provide investors with more space, closer beach access, and more amenities than their stateside counterparts.
Market Downturns: Avoid winding up in a negative equity situation by being careful of boom areas that can be hard-hit by market downturns. The phrase “up and coming area,” should be a red flag. Long-established beachfront areas are usually a safer long-term investment.
Long-Term City Plans: Be mindful of future city planning efforts that may impact your home in the long run. In other words, don’t buy a house that will be next to a highway in five years.
Oceanfront properties have proven to be more valuable than their offshore counterparts in the same areas. However, there are always considerations to take before buying. In some areas of the United States, for example, waterfront homes were hurt more during market downturns and were slower to recover than the rest of the market.
Investing in a waterfront property is an exciting and often rewarding venture. Just be sure to look before you leap so that you can feel confident that you are investing in a property that will hold its value and keep the equity from washing away into the sea.
Author Bio: Sacha Ferrandi is the founder and owner of Source Capital Funding, Inc., Hard Money First, and is an expert in oceanfront real estate. With over 17 years in the real estate industry, Sacha has worked with properties of all shapes and sizes.