Nantucket is now one of the most sought-after vacation home markets. Investors are all ears on this island’s real estate market, which appears to be booming presently. The ready market is a major factor behind Nantucket’s lucrative vacation home scene.
Many people want a vacation home, and the serenity of the island is an allure. You are in the right place if you want such a home, for business or as a secondary residence. For your convenience, we take you through distinct features of this real estate scene, which you should know before getting a home in Nantucket.
1. The Neighborhoods Vary
You may assume that because Nantucket is an island, the neighborhoods will be homogenous. This is far from the truth as the many residential areas vary in the surroundings and type of houses.
For instance, Nantucket’s historical downtown has the signature New England style. The houses are old but well-maintained.
Further from the city center is Siasconset, a village that boasts a European essence. It is the go-to residential area if you want some peace, away from the bustles of urban areas.
Cisco is popular among young people and surfers due to its amazing beaches.
Seeing this diversity, it would help if you thoroughly researched the island’s neighborhoods to know where to stay or invest.
2. High Cost of Construction
Many people who want to venture into the real estate market deal with one hurdle: buying or constructing. Constructing allows you to come up with a unique concept for your home. However, you may want to go past construction for Nantucket’s vacation home market, as it is pricey.
The cost of raw materials and labor is high, requiring financial stability. Picture this; you may have to bring in some raw materials from the mainland, the same as labor. The transportation expenditure alone may be too much for many investors.
A reasonable move is to buy a house on this island. Nevertheless, if you want to construct, you should be ready to shoulder the expenses. Use labor from Nantucket, as it is cheaper, boosted by experience on construction on the island.
3. Strict Construction and Renovation Rules
When constructing in Nantucket, you must observe the stringent regulations. The island’s Historic District Commission is responsible for maintaining the historical architecture, a huge part of Nantucket’s identity.
Before constructing or renovating a building on this island, you will need several permits. Officials will also inspect the progress to ensure that it meets Nantucket’s standards. The codes to observe when building or modifying a house include color, roof shape, height, and many more.
For your convenience, consult professionals experienced in construction in Nantucket. They will advise you accordingly on the available building options.
4. The Nantucket Land Bank Tax
The other distinct feature in the Nantucket home vacation market is the Land Bank tax. When buying a house, you pay 2% of the buying price to the Land Banks. This levy aims to protect Nantucket’s flora and fauna and secure access to the beaches and waterfronts. The tax is the property purchaser’s responsibility.
Furthermore, there is the first-time home buyer’s exemption. From January 2021, new home buyers get a tax relief for a maximum purchase price of $850000.
As a buyer, you need to fulfill all requirements stated in the Land Bank acts. Failure to meet the requirements calls for penalties.
5. Home Maintenance Cost
So, you have your vacation home on the island, time to sit down and relax, right? Not really, as you have to maintain your home to have it in good shape. Maintaining your vacation property in Nantucket is costly, especially if it is your secondary residence.
The climate is unpredictable, punctuated with heavy rain, storms, and snowfall, mostly in winter. The humidity can also affect the house’s interior. This calls for the regular maintenance of your house.
You may find some locals to maintain your property when you are not around, though it may be expensive. A worthy solution is to rent your vacation home for the months you won’t be around.
It is an excellent solution, as your house will be in good form, and you will earn rental income. As an investor, renting is a great way to start recouping your investments.
A Point to Note: Living on anIsland
Before buying a vacation home in Nantucket, you must be ready and comfortable living on an island. Nantucket is roughly 30 miles from the mainland, meaning the main form of commuting is by water or air. You should keep this in mind, especially if you frequent the mainland.
Also, the weather can be quite different. The island is very humid, and it might take you some time before you get used to the conditions.
Nantucket is a small area, with a population in the neighborhood of 10000. It is a friendly and close-knit community dedicated to preserving the island’s culture.
The Nantucket home vacation market is unique, as evident from this article. While it is an attractive real estate investment hub, you must keep up with the island’s strict home ownership regulations.
Use this piece as a guide on the home vacation market for a bearing on owning property in Nantucket.