What are the risks of buying waterfront property?

November 6, 2014

Although there can be a lot of benefits associated with owning waterfront property, you should also be aware of the risks. They can range from potential flood damage all the way to higher taxes associated with waterfront assessments. Here is a guide to the dangers you should be on the lookout for when purchasing your own waterfront property.

What are the risks of buying waterfront property?

Potentially higher taxes

Buying property on a lake or along the coast can provide amazing views, a quiet place for relaxing and even the opportunity to take a swim right outside your front door. However, property assessors are frequently raising their assessments on waterfront property, which can substantially increase taxes to the point that many sell their houses after receiving new assessments.

These reassessment hikes can be dramatic in some cases, especially if your neighbourhood starts becoming more in-demand or you've added on to your property. Many factors can be taken into consideration when assessing your property, such as whether there are panoramic views, a marina in the vicinity of your house, if the water is suitable for swimming and most importantly, what kind of home you have.

In some cases, your property assessment can rise as much as 50 per cent annually. It is possible to have your assessments reduced, but it can involve years of legal fights that cost time and money. Some see this as just a part of the cost built into having a beautiful waterfront home, but it's something you should keep in mind when choosing a waterfront home to purchase.

Water damage dangers

If your home is in an area that is prone to flooding, living on the waterfront increases the very real danger you will face some flooding problems during your lifetime. Flooding is not covered by many home insurance plans, so you'll likely have to pay extra for this coverage.

Even if you live near a section of water that isn't prone to floods, water can still find a way to damage your home. Water can creep under a foundation of a home, causing costly structural damage over time. You're going to want to thoroughly review the foundation of the home and perhaps hire an expert who can assess the potential for future water damage.

Waterfront homes are desirable properties that can bring a lot of joy to any homeowner. However, be aware of the dangers and make an informed decision to avoid the risks that do accompany buying waterfront property.

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