Skip to content

Should We Buy a House On The Beach? Tell Us Your Thoughts!


So here’s our potential plan: pay off our house in the next 3 years, sell it for around $125,000, and then use that as a huge downpayment on a $500,000+ beach house. We’d love to know your thoughts before we buy a house on the beach. Here are my assumed pros and cons to this plan.

Pros to Buying the Beach House

1) We’d own a hunk of land that would almost certainly appreciate in value since there is a very limited supply of waterfront land in our area.

2) We could enjoy our dream location for the rest of our lives. Both my wife and I love the water. We can’t get enough of the atmosphere, the views, or the sounds of lapping waves on the shore each evening. Having a property on the lake would be heavenly.

3) We’d be able to entertain often. With a house on the water, we’d have plenty of friends stopping by and visiting. We’d definitely love that.

Cons to Buying the Beach House

1) While having a downpayment of $125,000 sounds like a lot, we’d still have a mortgage of nearly $400,000, which equates to a $2,800/mo. payment on a 15 year loan.

2) High insurance and taxes. With a more expensive house, we’d obviously have to pay much larger amounts in these categories. Our insurance would probably jump to over a thousand bucks a year, and I imagine taxes would eat up another $7,000 per year. If we’d put these additional costs into the monthly payment, it’d raise it to about $3,500/mo.

3) We’d lose the opportunity to invest that money instead, which would have most definitely earned more than the value of the house, especially if you factor in all of the interest we’d be paying to the bank for that mortgage.

Alternate Plans

Plan A – Buy an Intermediate House and Then The Beach House

We have an awesome neighborhood nearby with some pretty sweet historical houses. Most of them have a price tag between $250,000 and $350,000. If we paid off our house in 2015 (as we’re planning), we could probably save enough within the next 3 years to buy the intermediate house outright.

Then, if we bought the house right, we could probably gain some value in it and save another $75,000 in the next 3 years, which would allow us to buy the beach house for cash (this means that we’d have to wait 9 years for the beach house).

Plan B – Stay In Our Home and Invest

Our house will be paid off in 3 years. After that point, our additional money would go toward rental properties. I figure that we could muster up $75,000 just a few years after the house payoff and put a hefty down-payment on a quad-plex, which would earn a cash flow of over $1,000 per month (above and beyond our aggressive mortgage payment).

If we invested this money conservatively for the next 6 years and continued to save our usual amount from our day jobs, we would be completely debt-free again, with our house ($150,000), our quad-plex ($200,000), and $150,000 in cash.

At this point, we could either sell it all and buy the beach house outright, or we could use the $2,000 per month of cash flow from our quadplex (remember, it’s fully paid for, so all of the cash flow goes to us) and use it on the new beach house, which would allow us to pay off the beach house in another 4 short years (plus we’d still have the equity and the cash flow of the quad-plex).

What Plan Would You Pick?

So, what’s your choice? What do you think would be the best move for us? Should we move to the beach house immediately so we can enjoy it for the rest of our lives? Or, should we choose option A or B? Or, maybe you’ve got another plan that could work. Let me know your thoughts! 🙂

Investing Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. I’d love to vote beach house NOW so we could come visit 😉 If housing costs are going to go up a lot within the next ten years then it might be a good idea to go for the beach house now. I do like plan B though for the sake of being debt free and avoiding the mortgage interest. You’re both still young and would have plenty of time to enjoy the beach house down the road.

    • Lol! I did say that we like to entertain didn’t I? 😉 I am leaning toward the debt free route as well. I don’t know if I’d feel right getting a new mortgage when I continuously preach about debt freedom!

  2. 1. A down payment of 125k on a 500k+ house isn’t huge, its expected.
    2. I would choose lake over beach any day, especially if you’re going to live there full-time.
    3. I would stick with your original plan of being mortgage free in 3 years and then start thinking about future plans. You have always talked about being debt free and owing someone 400k+ is the exact opposite of that.

    • I appreciate the “in your face” response AB. What do you mean you would choose lake over beach? This house would be on the beach along Lake Michigan. In response to number 3, yep, you’re right. I’d almost be a hypocrate wouldn’t I?

      • Hypocritical a tad, but not in a bad way. As you gain success it’s easy to shift in what you want. Take Crystal: She wanted to be debt free when she began. Then when she began earning $20k/month she wanted something bigger.

        For some reason, I’ve seen a lot of people recently unhappy with their beach homes and they all say they would rather have a lake home – much calmer. I don’t know much about Lake Michigan so I don’t know if it’s more “beachy” or “lakey,” but I’m sure it’s nice either way.

        Haha- didn’t mean to be “in your face.” I just couldn’t believe what I was reading!

        • I’ve always been leaning toward the no debt avenue of course, but I thought I’d leave it up to my readers for once and see what the majority of people would say about the topic. Thanks for your input! Always appreciate it.

  3. No doubt about it – Plan B. I would never buy a house on the beach, due to acts of nature.

    • I like Plan B as well. Since this house is on Lake Michigan, there aren’t too many crazy acts of nature. It’s not like we’re going to get hit by a hurricane or something.

  4. I live three blocks from the beach at a fraction of the price. Be careful to not get all of your assets tied up in real estate. You, ant t be diversified f we hit another crash. Insurance can be difficult to obtain and be very expensive so make sure you throughout investigate. Also check to see if it is a flood zone. If you have any question I could help with shoot me an email.

    • Great point Lance. It would be foolish to tie up all of our cash in our house, so perhaps we should go with Plan B?

  5. I vote beach house – but only for selfish reasons. I want to come visit… and I love the beach. Financially speaking, I love the real estate route. Why not delay the gratification an extra 6-8 years and own 3 properties. By the time the beach house is paid off, you could live in the beach house and retire on your investments + real estate income. Sounds good to me.

    • Lol. You’re already the second selfish person to respond! We’d still love your company though. I like your plan of delayed gratification with the real estate investments. Hopefully, this will be our next move in the near-future.

  6. After paying off your house, I think it would drive you nuts to have a $400K mortgage, so I’d say do whatever to buy it outright or at least only with a small mortgage.

    • I think you’re probably right Kim. I would most likely try to pay it off as fast as possible and would feel like I was getting nowhere because it’s such a large amount. I always invisioned myself paying cash for a place on the beach – I think I’ll stick with that plan.

  7. I think that you should stay in your current house longer than just the three years that it takes to just pay it off. Take as much time as you need, and then move to the beach 🙂 but you have to make sure that you pick the right house if you do!

    • Very respectable answer Mallory! I can’t forsee us getting in over our heads on the mortgage, but that beach house does sound tempting!

  8. I would propose buying similar homes as you bought and fix them up and rent them out or sell them. The homes at the lower end of the scale are always in demand and can easily sell. You have the skills to fix it up yourself which saves a lot of money. It will generate either a steady income and you can move up over time or you can generate a lot of capital gains.

    • Looks like we have a Plan C! 🙂 I think that’s actually a wonderful idea. Buy undervalued homes, fix them up, rent them out, and then do it all over again until our cashflow is insane! Thanks for the comment krantcents!

    • I don’t think we would ever build, we’d most likely just try to find an existing house on the lake. We’re looking at living on the west side of Michigan on the big lake. 🙂

  9. I would love to say “Go for the beach house now”, but since you are so close to being debt free, I think you should continue on your path.

    Plan A is a good alternative though. Instead of waiting 9 years for the beach house, however, why not put most of the money down, then take a small loan over five years.

    • Haha, I would love to say that too! But, I think you’re right about not jumping into debt again. I don’t even think we should have a small loan actually. Just build up some wealth and go for the beach house when we can afford it.

  10. Can you buy a less expensive house on the beach? We live in a resort area…a little ski town, and we absolutely love it. It’s very expensive, though, so we have had to downsize our dream home. Now, we find that we love the coziness of our home. I would say, Yes! make the move to the place you love, but don’t overmortgage yourself. It’s not worth the stress, especially in this economy. There’s got to be a screaming deal out there somewhere…or a place you can fix up over time.

    • Actually, I think $500k is probably the cheapest we’re going to find (on the big lake anyway). We honestly wouldn’t mind having a small house, just as long as we get to be on that beautiful lake! I’ll be on the lookout for that screaming deal. 🙂

  11. I think I’d definitely be paying off the current house, and then throw all that extra cash into investments for retirement. By not jumping at the opportunity to get the beach house (and the mortgage that comes along with it), you’d be able to make a lot of headway with investments. Personally I’d be far more satisfied to invest it in rental properties – and then buy that beach house flat out later on down the road.

    • I agree with you 100% Julie. With this method, not only would we develop a cashflow, but we’d also be able to retire sooner and enjoy that beach house for entire days at a time!

  12. If you can afford it, HELL YEAH!

    Live the good life now, not after you are dead.

    • Lol. Thanks FS.

    • Good choice DC. I think that’s the plan I like best too. The beach house can wait a few more years. If we buy in when I’m 35, we still have plenty of time to enjoy it. 🙂

  13. I tend to play things safe with real estate. Unless you are truly familiar with the market, you could have even more added expenses that you haven’t thought of yet. There will always be beach houses for sale – I’d say wait a while longer until it doesn’t feel like such a stretch. Then you won’t feel house-poor.

    • Very true. There’s no feeling that’s worse than being house poor. I’d much rather have a bunch of extra funds available for travel. 🙂 Thanks for the comment Wayne!

  14. I’m not the best person to answer this since I’m not really a “beach” person. However, I guess my question is, Is that your ultimate goal, to live on the beach? What happened to opening up the wedding store? I think the wedding store is a better option in the long run (I know that isn’t mentioned here, but still it could be a profitable option). If I have to choose one of these two plans,I’d go with plan B.

  15. I would say go and rent a beach house for a month and sea how it goes!

    • That’s not a bad idea! It’s better to get an understanding of what we’re getting ourselves into before a purchase right? Thanks for the comment.

Comments are closed for this article!

Related posts