A Home Buyer’s Guide To Buying A Lake House

Buying a lake house can be one of the most rewarding real estate and vacation home investments that you can ever expect to make. Potential financial upside notwithstanding, purchasing this popular house style can provide you with a perfect leisure time getaway for the entire family, and serene space right in your backyard.

What is a waterfront property ultimately worth to your household, though? Should you look into waterfront properties? What questions do you need to ask when buying waterfront real estate? These are all valid questions to consider when buying a lake house and, luckily, we have the answers.

What To Consider When Buying A Lake House

Owning a lakefront property isn’t like owning a home in a city or suburb. In addition to typical maintenance and upkeep needs, homeowners also need to account for any additional upkeep that may be needed due to heightened elemental exposure, and any travel time associated with visiting these often somewhat-remote locations. Like any major purchase, deciding to buy a lake house is an expensive, serious investment that should be well thought out so that you are not surprised later down the line.

When you’re looking to buy a lake house, you should consider:

Purpose Of The Lake House

When you’re deciding on purchasing a lake house, it’s important to consider whether the property will be a primary residence, a vacation home or a real estate investment. The intended use of the property will likely influence the location, size and price you’re willing to pay, among other factors.

If you’re looking for a primary residence, for instance, you may consider factors like work and school commutes, distance from a metro area and space/rooms. On the other hand, you may consider purchasing a quaint, single bedroom lake house located far away from a city center for a vacation home.

Privacy And Lake Access

If privacy is a concern of yours, you might be pleased to know that lakefront homes are generally on large plots, meaning there’s more distance between you and your neighbors. However, the local, state or federal government will usually own the lake your home looks over, designating it as public property. This means that you can anticipate recreational users visiting the body of water.

Expansion Of The Property

Due to zoning restrictions, wildlife conservation policies and natural structures, such as hills, trees and the shoreline, expanding on a preexisting lakefront property can prove difficult – if not impossible. While you may be able to add stories and build up, you may run into barriers when it comes to building out to create space.

Maintenance And Upkeep

You should also consider the costs associated with maintenance and upkeep of waterfront properties before making the purchase. In the summer and spring, you’ll have to spend more time and money upkeeping the property’s landscape and outdoor structures. In the fall and winter, you’ll have to think about protecting your home from the cold, snow and ice.

The extent of upkeep your home will require depends on whether your lake house is your primary residence, because vacation home maintenance is a bit different than typical maintenance. For instance, when winterizing a lake house, you’ll have to be extra cautious about unplugging appliances, cleaning out food and other items that may attract pests, removing your dock, water tasks to prevent broken pipes and so much more.

How Much Does A Lake House Cost?

While lakefront properties are gorgeous, the luxuries afforded to homeowners come at a price. Between offering an array of amenities and perks, and being situated at prime leisure locales, waterfront properties are generally in higher demand among buyers, and therefore tend to command a higher purchase price overall. This may mean having to pay a higher price to buy a beach home or lake house if you decide to add one to your real estate portfolio.

Before you buy this style of house, you should consider hidden costs, such as:

• Land: Keep in mind that when compared to their landlocked counterparts, lakefront land is generally more expensive. Also, it is common that municipal and federal entities own the lake and the shoreline land that lake houses are built on. This means that the home you’re interested in may come with a lease for the land it sits on.
• Property taxes: One upside to purchasing a home on leased land is that you will not be responsible for paying property taxes. On the other hand, if you own your home and the land it sits on, you will be responsible for paying property taxes, which may be more expensive than inland properties. 
• Flood insurance: Buying a lake house or beach house may also require you to take out additional insurance policies, such as wind insurance, water insurance and general hazard insurance, or policies which cover the threat of flood zones.
• Maintenance: In addition to weathering greater wear and tear due to natural conditions, their proximity to water and moisture may also render them prone to the need for added monitoring or repair. Before buying a lake house, it’s important to create a budget for house maintenance.
• Boat docks: If your property does not already have a boat dock, having one built can be an expensive feat. Also keep in mind that if your lake house is in a four-season state where the water freezes over, it’s recommended that your dock is removed and properly stored for the winter in order to prevent premature wear. If you are unable to remove the dock yourself, keep in mind that you will have to hire someone every winter to complete the task for you.
• Utilities: While you may not think too much about access to everyday utilities in a city, you will have to consider the cost of these amenities in rural areas. Lakefront homes are typically not found in concentrated urban areas, meaning utility expenses can often add up quickly. Depending on your area, you may deal with issues with hard water or garbage disposal. You could also purchase in a place where there is no natural gas service. Or there could be limited options for service providers in your area, meaning providers may have drastically high rates, but you are unable to switch. Regardless, it's important to do your research prior to settling on a place to avoid paying an outrageous utility bill.

• HOA: Some lakefront properties come with a homeowner’s association (HOA), which are private organizations that oversee the management of some residential communities. They also set the rules and regulations called for those living in the community. Generally, HOAs have monthly or yearly fees that go toward general upkeep and maintenance of shared spaces. The exact price can vary, usually averaging around $150 per month, but the exact number will depend on your community’s guidelines.

When Is The Best Time To Buy A Lake House?

It depends. Generally speaking, spring is a hot time of year for the real estate market. However, when you buy will ultimately depend on your financial situation, plans for the future, what kind of property your new purchase will be and more. You should take your time, crunch the numbers and purchase a lake house when the time is right for you.

How To Buy A Lake House

While every home buying journey is slightly different, the general steps to buying a house are similar. When you’re buying a lake house, your journey might look something like this:

1. Get preapproved: Before you try to take out a jumbo loan for your dream waterfront property, take a moment to get preapproved for a home loan. A preapproval is not a loan offer, it is a ballpark estimate of the amount you’ll be able to afford when you’re looking to buy a home. The lender makes this determination by reviewing your credit report, income, assets and debts.

2. Decide on the location: Now that you have an idea of how much you can possibly afford, it’s time to decide on which location you’re looking to purchase a lake house in. Are you looking to purchase in the Great Lakes region to experience all the Midwest has to offer? Or are you looking for a location which also gives you access to mountains and beaches, like west coast cities? Take your time and explore your options to see which location best fits.

3. Research the area: Now that you’ve picked an area, research all it has to offer. What’s important to you? Whether it’s the types of fish, water levels and quality or proximity to other activities, do extensive research to determine if your chosen destination is the best spot for you.

4. Find a real estate agent: Before you make the jump, connect with a real estate agent who will help you find the spot that best suits you. From here, you and your real estate agent will house hunt to find homes that fit your criteria.

5. Make an offer on a house: After you find the house of your dreams, it’s time to submit an offer letter. The letter will include details about you (like your name and current address) and the price you’re willing to pay for the home. It will also include a deadline for the seller to respond to your offer. If you’re absolutely certain you want this house and are willing to show the lender that you’re serious, you can consider sending in an earnest money deposit after making an offer.

6. Get a home inspection: Before the deal is finalized, it’s crucial that you get a home inspection. Although lenders do not require an inspection is completed before they grant a loan, it is a fairly affordable process that can save you thousands of dollars in repairs down the line.

The Bottom Line

Can’t wait to enjoy the sound of waves lapping while you kick back on a deck chair and recline with a glass of wine in hand? Ready to hoist your sails and set off for a day of sun, fun and adventure? Now that you have a better idea of what to look for and consider when buying a waterfront property, you’re well on your way to buying the lake house or beachfront home of your dreams.

To start your search for the perfect place to rest your flip-flops, get started on the application process with Rocket Mortgage^® today. Not quite ready yet? You can begin browsing the many houses for sale listed at Rocket Homes^SM. It won’t be long before you find the right spot – and distant friends and family members “mysteriously” start getting back in touch. Which, depending on how you look at it, is just another perk (or hidden cost) of buying a house on the water.