How to buy a lake house

The appeal of a lake house property is undeniable. Sunrises mirrored onto the lake’s glassy surface. Summer swims and boat rides. Lakefront bonfires that dot the shoreline. For both vacation rental guests and homeowners alike—the lake life can feel like a dream. However, when you’re in the market to buy a lake house, there’s more to consider than splashing, boating, and fishing (though, there will be plenty of that).

We manage (and take care of guests at) thousands of lake homes across the country, from Lake Arrowhead, California, to Lake Michigan. Here are the steps to take when buying a lake house investment property—especially when you plan to use it as a vacation rental.

1. Find an agent who specializes in lakefront real estate

Look for an informed real estate agent with detailed knowledge about waterfront properties (especially lakefront homes and vacation rentals), plus the experience and thorough understanding about the entire transaction process. Every lake, every shoreline, and every climate brings both opportunities and challenges. Only a local agent experienced with lake homes will know that you’ll need a shallow water lift if you want to go boating in the spring, when water levels are often lower.

Your agent should be both a partner and a smart resource. Vacasa’s extensive real estate agent network has in-depth knowledge of local markets and can help you make an informed investment.

2. Choose the right waterfront location based on your lifestyle

Not all waterfront is created equal. Choose your lakefront home based on the type of lake lifestyle you’re interested in. Enjoy boating and watersports? Opt for a property close to the largest part of the lake. This is often where you’ll find homes with boat slips, docks, or boathouses. Prefer something more peaceful and relaxing? Consider homes on a more secluded side of the lake. Or, if you’d like to attract the highest number of overnight guests, look for a location with plenty of activities and conveniences nearby.

Check out Vacasa’s rankings of the top places to buy a lake house, based on the rate of return on investment.

3. Inspect the property and waterfront carefully

Higher moisture levels can cause mold or mildew in lakefront homes, so conduct a detailed inspection before committing. Surveys, elevation certificates, water quality tests, and more can be used to determine whether your waterfront home is a good investment or a disaster in disguise.

Take that extra step and go out on the water. After all, you’re also investing in the water itself. You’ll want to be sure the home isn’t located on a body of water choked with debris and weeds or any other less-than-ideal landscaping.

4. Check insurance requirements

Because of a lake house’s location on the water, it pays to be protected. Waterfront homes naturally have a higher risk of flood damage, and it’s best to thoroughly discuss options with your realtor and insurance agent before signing a contract. Look into homeowners insurance, flood insurance, and vacation rental insurance options early.

5. Research the shoreline and weather conditions

Shorelines morph over time and water levels fluctuate based on seasonal and weather conditions. When water levels rise too high, you could end up with some property damage. If the water levels fall too low, it could hinder your access to the water. With the help of a knowledgeable real estate agent, look into the history and consider the future of the shoreline. Also ask about common weather occurrences. Does the area experience heavy rainfall each year? If so, find out how homeowners in the area usually protect their homes from possible damage.

6. Look into hidden costs and utilities

Lakefront properties can carry additional expenses that buyers might not be aware of. Water and sewer rates could be more expensive, boat dock and lift fees need to be paid, and septic tank pumping fees can add up. With more acreage and privacy than inland homes, waterfront properties may offer fewer conveniences and require any personal adjustments before move-in. Take this into consideration when purchasing a lakefront vacation home and setting your nightly rental rates.

7. Know what upkeep and maintenance to expect

Waterfront homes can encounter a bevy of natural elements all year round, such as storms, mist, sand, and humidity. All these factors can cause more wear and tear than usual on your vacation home’s exterior and interior—which means more maintenance to keep it in prime condition. Additions like a boat dock and boat house will also need to be looked after.

8. Understand the local rules and regulations

If you’re purchasing a waterfront home that you’d like to use as a vacation rental, be sure to understand the rental market in your area. Local governments (city, county, state, or all three) dictate how you can operate a vacation rental, if at all. Some places require business licenses. Some collect higher property taxes. Others demand you collect a lodging tax per booking. Stay up to date with all the regulations and rules governing your rental, so you can run it both profitably and legally.

To make things easier, Vacasa has local staff in all of our markets who can assist you with staying in compliance.

Want to buy a vacation rental property, but not quite sure a lake property is right for you? There are plenty more possibilities. Check out Vacasa’s tips for investing in mountain cabins and beach houses.