Pull back the sliding glass door onto my terrace and you’re met with the sound of crashing waves and scent of salty air.
Here in Praia D’El Rey, on Portugal’s Silver Coast, I’m about as close to the ocean as one can get.
And that’s not an exaggeration. Since this condo was built, new regulations have been put in place that restrict building within 500 meters of the coastline. So, they literally aren't making any more of these.
What’s more, my total monthly payments (mortgage, taxes, HOA fees, and golf club dues on two great courses) comes in at just under €1,110 ($1,350). That’s less that what property tax alone would come at in California.
Considering just how rare it is to find great value ocean-view homes, my beachfront condo here in Praia was a steal.
And there’s more deals here besides…
That’s why I’ve decided to make this the setting of this month’s Dream Homes Digest. I’m currently finishing off my report and I’ll be dropping it to RETA members very soon.
Today, however, I’m handing you over to my senior researcher, Margaret Summerfield. With 15 years of real estate scouting experience behind her, she knows just how much value an ocean-view can add to a home…and when the deal might not be worth it.
How Much is an Ocean View Worth to You?By Margaret Summerfield
As I write I'm in Antibes on the French Riviera. This is a shot taken on my morning walk around Fort Carre, the marina, and the iconic Le Nomade sculpture.
I'm staying in a two-bed apartment between the marina and the center of Antibes. It doesn't have any views. A sea view would have been wonderful. But the rental rates for anything with a view were way too steep. Studios and tiny one-bed apartments with sea views...mostly with well-worn furniture...were listed at the same price as the comfortable, spacious two-bed I'm in, which also has a large courtyard garden.
In Antibes, a tiny studio in an old building, that's a complete wreck, is listed at €134,000. It's 300 square feet and little more than four walls. And, of course, it doesn't come with a view.
A studio of 270 square feet has an ocean view balcony—and an asking price of €235,000.
A one-bed condo with a sea view is on the market for €270,000. It's also small, only 485 square feet. But it is move-in ready.
The lowest price condo I found with two bedrooms, a central Antibes location and big sea views, is listed at €795,000. It's still on the small side, at 656 square feet. And the sea views are only from the balcony off the living area.
There's always a premium attached to ocean views. One study from 2018 showed that even a poor, partial ocean view could add 8.2% to the value of a property, up to as much as 68% for an unobstructed ocean view.
In expensive markets like Antibes, the cost of a sea view can come as a shock...
So, how do you get that desirable view if you haven't got a few million sloshing around in your bank account?
The answer is to look elsewhere.
The French Riviera is an established jet set destination. It's developed, with all amenities and conveniences, and has been for many decades. It has a history of the super wealthy visiting and buying homes stretching back to the mid-19th century. It's a brand, a name people recognize and are willing to pay a premium for.
To get deep value, you should look to emerging locations. Places that aren't established—yet. These places may have better beaches, a cheaper lifestyle, nicer weather than the French Riviera...but they're still growing. That means lower prices and bigger potential for gains.
Take Los Cabos in Mexico. In 2015, Real Estate Trend Alert members could buy spacious two-bed two-bath condos, with ocean views, in a 5-star beach and golf resort for as little as $336,156. In September 2019, the developer's price list showed the last similar condo listed at $630,088.
That type of appreciation simply doesn't happen in "older" spots like the French Riviera. Los Cabos was a rustic outpost until the 1950s. Development has accelerated in recent years, with dozens of new resorts, golf courses and residential communities and improved accessibility. More folks want to own in Cabo, and vacation there. That means if you buy right you can lock in capital appreciation and rental returns.
Wherever you buy, here's what else to bear in mind when shopping for a home with an ocean view.
First, make sure the view is protected. The last thing you want to do is pay a premium price for a view only to lose it. Understand what could happen around your home that might affect the view. Check with the local municipality what's currently allowed—such as maximum heights for buildings in front and to the side of your property—and if that could change in the future. Buying next to a protected park or right on a boardwalk gives you some protection.
If the property is close to the ocean, maintenance is hugely important. Saltwater is corrosive, so anything made of metal or wood (windows, roof joists, decking) will need lots of care and attention. Factor that in when you're buying. It adds to your overhead costs and finding someone reliable to deal with this maintenance can be tricky if you don't want to do it yourself.
In much of the world, beaches are commercialized. Governments grant concessions (a type of lease) on them. I'd normally recommend steering clear of concessions but in some cases it's worth it, such as when you own a beachfront property. Buying the concession on the beach right in front of your home means nobody else can get it—and put up a busy beach bar.
Visit the home at different times of the day. This applies when buying any property. A neighborhood that might seem sedate at midday could become party central at night, for example. Check out the vibe at the weekend, as well as on weekdays. And chat with residents, too. A popular summer vacation destination might be dead in winter, with no dining options and little to do. And if a sunrise or sunset ocean view is what you really want—visit at sunrise or sunset.
Find out if insurance is available and how much it will cost. Waterfront homes in particular are at a higher risk of wind and flood damage. You may need more than one policy to cover all risks, so it's best to chat with an insurance broker (ideally one who deals with property that's close to the ocean or waterfront). The age of the property will come into play here, as newer ones are more likely to be built to deal with storm surges.
Your Comments and Questions
Emily says: Hello, I just wanted to share an interesting article about the effect of COVID on the Canary Islands real estate prices. Apparently, it’s dramatic. You can read the article here.
Ronan says: Hi Emily. Thanks for sharing. Be sure to check out the cheap Canary Islands property listings I shared a few weeks ago. You can read it in the archive here.
Your Daily Dream HomeCuevas del Almanzora, Almeria, Spain€75,600 ($91,500)
In the region of Almeria on Spain’s southern coast is this two-bed, two-bath apartment. On the second floor (first floor if you live in Europe), and set within a courtyard, it has a kitchen and living/dining area that opens out to a sun terrace. There are views of the community’s golf course, swimming pool, and gardens. As a resident here, you also have use of the roof solarium and a parking area. Amenities include a spa, bars, restaurant, terraces, and sun lawns. It’s the perfect sunny Spain getaway.
Remember, we don't make money from any listing shared here in the Your Daily Dream Home section. We have no dog in the fight. We're just sharing cool properties we've found.
I haven't visited this property or done due diligence on it. If you're interested in the listing, you should hire an attorney and do your own due diligence.