Things to Know When Buying an Investment Property in Galveston

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With over 30 miles of sandy shoreline and easy access from Houston, Galveston is a popular vacation destination. It’s full of fun tourist attractions like water parks, museums, Moody Gardens, and shopping, plus it has a busy cruise terminal and port for boating and deep-sea fishing.

With more than 7 million annual visitors, Galveston can be a great spot to invest in the rental market. While property values have been on the rise the past few years, Galveston is still more affordable than many other vacation destinations along the Gulf coast.

What are the Benefits of Buying an Investment Property in Galveston?

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Thanks to months of warm weather along the coast, Galveston has a long  summer tourist season with other peaks throughout the year. February brings a crowd for  Mardi Gras! Galveston, whereas March and April draw  spring breakers. Even  winter sees snowbirds coming down to escape the cold.

The tourism sector in Galveston is growing, and the island has around 6,000 hotel rooms to support over 7 million annual visitors. This usually means a high demand for vacation rentals, the perfect conditions to own an investment property.

What Should You Look for in a Galveston Investment Property?

If this is your first time buying an investment property in Galveston, you may be wondering what you should look for. We all have preferences for our full-time homes, but vacation properties and short-term rentals include a different set of goals.

You need to keep in mind both what makes sense investment wise for you, and what a potential renter will be looking for from the property.

1. Location is Key

Location is one of the most important aspects of selecting a real estate investment in Galveston. Before your search, research the neighborhoods you are interested in to find out whether they are in-demand for short-term rentals and whether any zoning laws apply that may impact your ability to rent as you’d like.

2. Waterfront vs. Inland

In Galveston, you need to decide whether or not you want a property directly on the water. With options both on the beachfront and the  Galveston Bay side, there is a lot to consider. Of course, waterfront properties come at a premium, but they can be more lucrative with renters as well.

3. The Perfect Size

With everything from  condo studios with a Gulf view to  historic cottages to large beachfront homes, Galveston investment properties cover a huge range of options.

While you may already have a vision in mind when it comes to the type of property you want to buy, it’s helpful to have your local real estate agent run numbers to find out the potential rental income of different property types, sizes, and areas before getting too far into your search.

4. Amenities Rule All

The amenities of your Galveston investment property are also super important if you plan to rent it out. Consider things like whether you’d prefer a condo building with a pool and gym onsite or a single-family home with a patio, canal access, or a private hot tub.

It can help to keep in mind who your ideal future renter will be. Do you want a large space with robust amenities or something cozy and luxurious?

5. Future Development

Development plans can impact property values positively or negatively and are an important factor to consider in your purchase. A local buyer’s agent comes in handy here to advise you on any upcoming plans and help you navigate how it may impact your future values.

6. The Right Zones

Understanding local regulations and zoning restrictions is crucial before buying an investment property in Galveston. If your goals involve short-term rentals, you will need to make sure that your property is zoned properly and that any applicable homeowners associations allow it as well.

Luckily, Galveston is pretty vacation-rental friendly, but you may need to apply for permits before launching your home.

Should You Hire a Buyer’s Agent?

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Hiring a buyer’s agent in Galveston to represent you in your investment property search is essential! A buyer’s agent works for you, advocating for your best interests through the search and sale process.

A licensed real estate agent will be by your side through the entire home-buying experience, providing expert guidance, ensuring that your objectives are prioritized, conducting market analysis, giving professional advice, and negotiating competitive pricing.

What Should You Look for in a Galveston Real Estate Agent?

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Before hiring your Galveston real estate professional, here are a few things to consider.

Galveston Island Local

Hiring an agent with local expertise is extremely important. You want your agent to be familiar with the Galveston real estate market, know about applicable regulations and ordinances, understand property values on the island, and spot hidden gems. A hometown agent can even point you to their favorite restaurants and know which  beaches are least crowded on holidays.

Investment Property Experience

An agent for a Galveston investment property search should have experience navigating vacation and short-term rentals. An experienced agent will help you avoid pitfalls and look out for issues that may impact your investment.

While the search may sometimes feel the same, buying an investment property is not the same as purchasing a full-time home. There are different aspects to remember, including everything from local regulations for short-term rentals to occupancy rates.

An agent with the right experience can help you navigate all your finance, insurance, and property management questions, even if it means pulling in another local expert for further consultation.

Effective and Quick Communicator

The right real estate agent for you will communicate in a way that makes you feel heard and comfortable throughout the entire process. They should be able to educate you about market data, break down complicated information, and keep you in the loop along the way.

Having an agent who is a prompt and effective communicator can also make a big difference when it comes time to work out a deal. Competitive properties sell quickly, and it’s essential that your agent stays on the ball, helping you understand complex deals quickly and negotiating firmly and strategically with the other parties.

Skilled Negotiator

Having a skilled negotiator as an agent makes all the difference in working out the best possible deal. A buyer’s agent will negotiate on your behalf, look out for your best interests, and help maximize the value of the investment property you choose.

Knowledgeable About Market Trends

Working with a buyer’s agent who stays on top of market trends can give you a big leg up when looking for homes for sale in Galveston. They should be able to identify the best investment property opportunities, provide you with relevant data and insights about the community and other recent sales, and assist you in making informed decisions.

Figure Out Financing Before Your Search

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It’s important to sort out your financing before you start your search in Galveston. Explore the available loan options for an investment property, research mortgage rates, and find out how much you can afford. On top of that, a proof of funds letter may help speed up the negotiation process when you find the right spot.

A knowledgeable buyer’s agent can help you find the perfect lender for your needs. Someone deeply familiar with the local market will be an asset when selecting a lender.

When buying an investment property in Galveston, you should also meet with your financial advisor to explore how the purchase will fit into your overall financial health and long-term money goals.

Research Insurance Options and Property Taxes

Before closing on your new asset, make sure you understand the types of insurance needed for an investment property in Galveston and your property tax assessment. Above typical homeowners' insurance, you may need additional coverage for the liabilities involved in renting out the property.

Factor this cost, as well as annual property taxes, into your overall financial picture to anticipate the profitability of your investment.

Who Can Help You Buy an Investment Property in Galveston

Dreaming of buying a modern condo with a Gulf view? Or a spacious coastal home steps from the beach? Galveston offers tons of options for vacation homes and investment properties.

When you’re ready to take the plunge into island real estate, Sand `N Sea REALTORS® are on hand to show you the best spots and hidden gems. With 50 years of experience with Galveston  vacation rentals and real estate,  Sand ‘N Sea Properties is the perfect partner in your search.