Cost Of Owning An Outer Banks Beach House

Real Estate Broker/Owner with OBX Realty Group NC#223529

Many people would love to own a beach house on the Outer Banks but have no idea how much it costs or what’s involved.

Since most of the houses on the Outer Banks are used as weekly vacation rentals many people want to know what portion of the rental income will help pay for the expenses and what will be left over to go towards the mortgage? As a general rule you can use a 60/40 split. 60% of the gross rental income will go towards the expenses of the house such as, utilities, management fees, pool/hot tub cleaning, maintenance, taxes and insurance. The other 40% will be left to help cover the mortgage. The expenses on these houses will vary depending on size, whether you have a pool or hot tub, and what the current management companies charge among other things. The gross rental income will vary by the amount of weeks the owner keeps the house open for rentals or how much the owner uses the house during peak rental months.

 Example: Average 4-5 Bedroom home on the Outer Banks cost approx. $500,000

$500,000 x 20%($100,000) down =$400,000 Mortgage @ 5% 30yr P&I payment=$2148 month $2148 (monthly payment) x 12= $25,776 annual cost of mortgage

Average annual gross rental income $35,000

$35,000 Rental Income X 60%= $21,000 to cover annual household expenses including taxes & insurance

$35,000 - $21,000(expenses) = $14,000 left to go towards the annual mortgage payments

$25,776(annual cost of mortgage) - $14,000= $11,776 annual cost to own a beach house or $981.33 a month.

Knowing how much the house is going to cost to operate along with your down payment amount and mortgage payment will give you the information you need to make an informed decision. Also keep in mind that there are tax advantages to owning a 2nd home or investment property. Consult your tax advisor for more information. If you are looking at houses on the internet and want a quick calculation the 60/40 method is a good start. Remember; always consult a local Realtor for exact income and expense histories on a specific property to determine if that property is right for you.

 You never know, owning a beach house on the Outer Banks may be more affordable than you think!

About the author of this blog: Matt Huband, SFR is Broker/Owner of Hometown Realty in Kitty Hawk, NC and a Certified Short Sale & Foreclosure Specialist. Matt works with buyers and sellers from Corolla to Hatteras interested in foreclosures, short sales, 2nd home, investment property, new construction, and condo sales. Put Matt's extensive area knowledge to work for you.

To learn more about Outer Banks real estate go to or email . Sign up to receive a FREE Foreclosure & Short Sale List

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About the author of this blog:

Matt Huband is Broker/Owner of 
OBX Realty Group in Southern Shores, NC. For 13 years Matt has worked with buyers and sellers from Corolla to Hatteras who are interested in 2nd home, investment property, new construction,  foreclosures, short sales, and condo's.  Matt has been helping his clients realize their dream of owning an Outer Banks beach house. Put Matt's extensive area knowledge to work for you. Contact Matt today to get started on finding your new beach house.

To learn more about Outer Banks real estate go to or email

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