The reason of course is people simply like to live near or on the water. Beach front properties, canal border properties and lakefront properties all retain their value, nearly regardless of the overall real estate market. In real estate, the biggest factor in property values is location, location, location. And being on the water is always the most prime of any location. Inland real estate does not command the same values as waterfront and is more susceptible to market forces.
VACATION PROPERTIES
One of the biggest advantages in owning waterfront property is its value as a vacation home. This makes for an attractive getaway when you need it most. Because you own it, you don't have to search high and low to book a room. Nor do you have to be subjected to unexpected surprises such as loud guests, skimpy towel supply and pillows too hard to too soft. With a waterfront vacation home, you'll be guaranteed a spectacular, tremendous view. With inland properties, you see only your neighbor's home.
RENTAL INCOME
Another reason waterfront properties appreciate and hold their value is because they are attractive rental properties. If you can't be in a waterfront home as you would like, there's nothing wrong with having someone else pay the mortgage. It also makes for a nice tax break if the home rents for two week or less during the year. Not only that, you still get to deduct the property taxes, according to a news report by CNN Money.
LOCATION, SIZE AND VIEW MATTER
As stated above, inland properties typically don't have a waterfront view. But just because a home is near the ocean, near a lake or pond, doesn't mean it will have the same value as the home which literally borders the water. The view is an important factor in the value of waterfront real estate as well as the size and popularity of the body of water. Size also makes a difference. The larger a waterfront property, the bigger its worth.
SUPPLY AND DEMAND
There's only so much coastline in the world. The Florida Keys, Atlantic, Pacific and Gulf Coast might be thousands of miles long, but they are not infinite. Inland properties are far more numerous than waterfront properties. This is very key to the high real estate values found consistently in waterfront properties.
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