Here is a list of the top 7 items I discuss with any new buyer who is looking for their vacation or investment home on the Outer Banks.
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1. How much do I need to put down?
Be prepared for 20% or more down. Depending on your situation the bank may require more
(like when buying a condo) because it’s not your primary residence.
2. Qualifying for the Mortgage
You can use up to 75% of the rental income the home generates in order to help qualify you for
the mortgage. You will need at least a 3-year history. Keep in mind, this will mean you have to
apply for an Investor loan which does carry a slightly higher interest rate.
3. Flood Zones
The entire Outer Banks is in a flood zone. Some areas are in flood zone X which means no
insurance is required. Most of our area will qualify for the National Flood Insurance Program,
which usually runs less than $800 a year.
4. Foreclosures
If you buy a foreclosure, you’ll have to re-furnish the home and buy it as-is. For some reason,
the banks just haven’t figured out that the furniture in these vacation homes is valuable and
needs to stay.
5. Local Taxes
The local county and city taxes are very low here. We generate so much revenue from the
weekly guests in Occupancy Tax and also in Transfer Tax on the sale of a home that the annual
taxes can stay very reasonable.
6. Property Management Information
Property Management fees vary based on the services you select from the Manager. It’s sort of
an a-la-carte situation these days. Depending on how much you want the Property Manager to
do for you will determine the percentage you’ll pay.
7. Outer Banks Real Estate Average Sales Price
The Median Sales Price for a home on the Outer Banks in June 2005 was $507,000…December
2016 was $315,000. NOW is a GREAT time to buy your vacation home!
For more information on how to get a home of your own on the Outer Banks, email us at salesinfo@beachrealtync.com today!
Written by Ilona Matteson, Director of Broker Development.