The Complete Guide to Investing in Lakefront Property

Like all Hayden Outdoors real estate professionals, Kevin Doyle knows land. Kevin is the oldest of the four Doyle Boys, while growing up on the Tri-Lakes in Mecosta County, Michigan. His genuine love of the outdoors started at a very young age and most of his adult life while living on Lake Mecosta, where he and his brothers embraced every water sport imagined, plus fishing and hunting, while ice fishing and snowmobiling in the wintertime. Kevin’s passion for lake living is evident while sharing his experience and knowledge with friends and clients alike who are considering investing in lakefront property.

If you’re dreaming of lakefront property, imagining afternoons spent relaxing in the screened-in porch room or evenings on the deck that overlooks your dock as the sun sinks low, Kevin has some tips. Here, he walks through important things to consider when buying a lakefront home or property. 

Types of Lakefront Properties

Private vs. Public

When it comes to talking about lakeside real estate, there are really two important types to consider: public and private lakes. While owning property on a public lake still ensures you are the homeowner, the main difference is access. Public lakes offer public access points while private lakes are for home and landowners only. “If you’re a private owner of lakefront property on a public lake, you just need to know the lake will get busier, compared to a private lake,” says Kevin. Public lakes do typically offer blanket regulations, such as no overnight mooring, but they can lack the sanctity of a private lake. 

Seasonal vs. Year-round

And these days, lake living isn’t always a summer-only endeavour. Many people who buy do so planning to live on the lake year-round. If you’re buying a seasonal property, you’ll need to keep winterizing in mind – making sure your property is properly shuttered and maintained for the colder winter months. However, according to Kevin, many newer lakefront homes provide plenty of amenities. “These days, it’s easy to settle into year-round lake life in homes that feature vaulted ceilings, a lakeside wall of windows, sliding glass doors out to a patio or deck, three- and four-season rooms.” Yes, please. 

Developed vs. Undeveloped Shoreline

To this point, it’s important to consider how developed and modernized you want your property to be. For some, the appeal of a knotty pine, rustic lakefront cottage with a natural rocky shoreline is the ideal. Others prefer more developed features, such as steel seawalls and permanent docks, firepits and sand volleyball courts. 

Finally, keep in mind that not all lakefront property is right on the lake. Important distinctions include:

• Waterfront: The property line adjoins the water and homeowners have direct access to the lake. 
• Water access: The property might share a path or a dock that provides access to the water. 
• Water view: As the name suggests, this type of lakefront property offers views of the water, but does not have direct access, although many lakeview neighborhoods and homeowners associations do offer a shared private beach or dock. 

Financial Considerations

Ask Kevin about the price trends for lakefront property and he’s quick to point out the supply-demand aspect of this unique type of land ownership. “A lot of family cottages will stay in families for generations. I just listed one on a springfed lake. This cottage has a beautiful 169 feet of beachfront; been in the same family for 55 years.” This type of generational ownership plays a big part in lakefront properties continuing to appreciate year after year. If you’re looking to buy, prepare your pocketbook for premium pricing in waterfront locations. 

An additional annual expense is property tax. While all home and landowners pay property tax, it is a tax that is assessed based on the value of the property. In short, the more the property is worth, the higher you can anticipate your property taxes to be. 

Given its unique waterfront location, your lakeside property might require additional insurance coverage, but this is dependent on location. Says Kevin, “Here in our area, in most of Western Michigan actually, most of the lakefront properties are not in any type of floodplain, so no additional insurance is required.” Flood insurance might not be applicable in many areas, but talk with your insurance provider to make sure you have adequate coverage for the following:

• Liability or umbrella insurance, especially if you have a lot of water toys, boats, a dock or any other feature that could result in additional risk or injury.
• Hurricane and storm surge coverage, while more important for those who live in coastal areas, large lakes can still experience storm surges large enough to cause property damage. 
• Windstorm coverage
• Boat insurance (if you have one)

Covering Your Bases

When buying any type of property, it’s important to talk with your real estate professional about all of the financing challenges you might face and possible solutions. Lakefront property can come with unique obstacles, namely higher property values and costs that require higher loan amounts, the potential for increased insurance costs, county and HOA property restrictions and specialized appraisals. Work with your real estate agent to establish the best path forward. If you’ll need to finance the property, explore all of your options, including fixed and adjustable mortgage rates, USDA and VA loan programs if applicable and seller financing. 

If your dream property is still out of your financial reach, don’t give up. There is always the option to explore smaller properties and lakeview properties. In Kevin’s home state of Michigan, for example, there are 11,037 inland lakes that are five acres or bigger, according to the Michigan Lakes and Streams Association. While you can’t buy or build on all of these lakes, that number does lend itself to plenty of possibilities. 

And it’s worth keeping in mind that lakefront property will almost always be a winning proposition. Kevin confirms, “Lakefront properties hold their value strongly.” They are highly sought after real estate. “On some of the most desirable lakes, I have several buyers who are just waiting for the right property to come available. Lakefronts have appreciated at a greater amount than some of rural property types. Lakefront properties are just a wonderful investment for making memories with your family and friends. You can not put a value on that. And that’s what lakefront living is all about.” 

Environmental and Regulatory Factors

Buying a lakefront property can bring with it a variety of environmental considerations. One of the big ones, according to Kevin, is whether the lake is spring-fed or not. “Most of our lakes in Michigan are considered spring-fed lakes. There are good natural groundwater springs throughout the lakes themselves that replenish every year, or daily. These lakes are going to be the healthiest. They’ll typically have better water clarity. The water quality is better and healthier for aquatic life; they tend to have fewer invasive species.” 

In addition to the water source, consider these key environmental restrictions. 

Shoreline regulations and building restrictions:

• Setbacks – the minimum distance homes and other structures must be from the shoreline
• Shoreline alterations – look to local agencies and authorities before removing vegetation or doing any major excavation
• Structure restrictions
• Erosion control
• View impediment

Riparian rights

Riparian rights refer to access rights associated with the ownership of land that directly borders a natural watercourse. In short, riparian rights allow property owners the use of water for various purposes so long as that use is reasonable and does not impede or harm other riparian owners or the public. In short, if your lakefront property is in close quarters to your neighbors, a public boat launch or other natural, personal or community infrastructure, it’s on you as the property owner to be respectful of general boundaries. 

Flood zones and FEMA considerations

It’s worth working with your real estate professional to understand any FEMA flood zone designations that might affect your property. The FEMA Flood Insurance Rate Maps (FIRM) designate areas of varying flood risk levels. Ensuring you’re compliant with any potential flood zones will help keep people and structures safe, preserve the natural beauty of the property and maintain the best flood insurance rates possible.  Note that homes on natural lakes are often not in flood zones – the topography of the land ensures it!

Environmental protection requirements

If you’re investing in lakefront property, you most likely want to preserve its natural beauty as much as anyone. There are some essential environmental considerations and ongoing maintenance and management to think about before diving in, so to speak. 

• Erosion control
• No dumping in water policies and protocols
• Slope protection
• Pollution prevention
• Stormwater and wastewater management
• Zoning laws
• Building and shoreline modification permits

Water level fluctuations and management

Whether you find yourself on a natural spring-fed lake or a vast expanse of dam-controlled fresh water, make sure to consider how much water levels might fluctuate throughout a season. Will you need to pull your dock every fall, or is it permanent and able to weather ice and long winter months? Do you have shore stations for boats and other watercraft or will you need to pull your boat out of the water completely and store it? Is the lake prone to large swings in water levels due to irrigation factors, dam releases or spring run off? Keep these important questions in mind when planning for time and maintenance costs. 

Property Evaluation

In addition to extraordinary sunsets, prime fishing, lazing on a sunny dock or mixing up some mid-afternoon water games, the beauty of finding your perfect escape extends to properly evaluating the property before you buy. By all lakefront lifestyle measures, Kevin is an expert. Here ares some of the key points he likes to walk clients through before signing on the dotted line:

• Perform a complete water quality assessment to make sure your shoreline is healthy and swimmable.
• Work with an expert to test shoreline stability and establish proper, natural erosion control. 
• Make sure you understand your personal lakefront access, public access and riparian rights as they relate to your property as well as nearby services, such as boat gas stations, marinas and docks. 
• Walk your property line to get a complete idea of how much privacy your lakefront land will afford you and your family. 
• Talk through dock and boat storage options, especially if you don’t plan to stay through the winter. 
• If you’ll only be enjoying your lakefront home during the summer months, make sure it is properly winterized and shuttered by the time winter comes to avoid property damage or theft. 

Ownership Responsibilities

Again, the ownership responsibilities of lakefront property are unique, and working with someone who fully understands the joy and implications of the task is important to the success and longevity of your investment. Before you buy, talk with your real estate professional about the time commitment and other responsibilities of owning lakefront property, including: 

• Special maintenance requirements
• Shoreline preservation
• Community obligations and restrictions, and whether or not your property is part of a homeowners’ association or lake association
• Seasonal preparations and weatherproofing
• Wildlife management, including contributing to and preserving a healthy aquatic ecosystem

Lifestyle Considerations

Kevin refers to the “lakefront lifestyle” often and with the type of appreciation you only find in a kindred spirit who knows. He gets it and understands the literal and figurative ebbs and flows of a life spent on fresh water. It’s his inherent knowledge that sets him apart from other real estate agents when talking about lakefront living. 

It’s important, according to Kevin, to know the ins and outs of your lake, including what type of lake it is. “All-sports lakes are big bodies of water – large enough where you can waterski, wakeboard, do some high speed boating, those types of activities. If an all-sports lake is under 400 acres in size, it will typically have a no-wake time, typically between 7:30 p.m. and 11:30 a.m., to give fishermen and people time to enjoy the lake without high speed boating and personal watercraft.” 

He continues, “If you’re on a smaller lake that’s considered a no-wake lake, there’s usually also a restriction on horsepower, usually 10 hp or below. Some lakes have restrictions on electric motors altogether.” 

Know Your Goals

This is all to say, think about what kind of enjoyment you’re seeking in buying lakefront property, including:

• Recreational opportunities, such as boating, fishing, kayaking, paddleboarding and swimming.
• Community aspects of lake living, knowing you’ll need to share your big blue front yard with others, which can be fun and highly rewarding. Just ask Kevin; he loves a good boat poker run! 
• Seasonal changes and accessibility
• Work-from-home viability and whether or not this factors in. As work-from-home options become more popular, many have flocked to more secluded parts of the country to clock in. Make sure your lakefront home or cottage offers sustainable resources if you choose this path, including high-speed internet and phone options.
• Family considerations, including your family’s interests and how long you hope to own the property.

The Buying Process

Buying a lakefront cottage or home can be a lifelong dream realized. It can become a legacy property, passing from one generation to the next, and a place where generations come together to celebrate, relax and play. Given all of this, it’s important to work with someone who understands the special aspects and specific requirements of buying and selling lakefront. “Try to find someone who really knows what they’re talking about,” says Kevin. “Someone who has lived it and has a passion for it. When you find someone who knows what lakefront lifestyle is all about, that makes a big difference.” 

Make sure to talk with your real estate professional about key inspection points that are unique to lakefront properties, negotiation strategies and due diligence specific to waterfront. Doing the legwork upfront will mean you’ll get to sit back and relax once you close on your shoreline dream home. 

Conclusion

There are a lot of things that set a lakefront property apart, but to Kevin, it comes down to one very important element. “With my background, growing up living the lake lifestyle, it’s all about the view and the setting. To me, that’s just as important as what the cottage or home has to offer on the inside.” If you’ve spent time jumping off the end of a dock into crystal clear blue water, recounted a sun-soaked day with family and friends overlooking the lake at sunset, or found sanctuary on the boat in the middle of the lake, you know what Kevin’s talking about. And if you’ve always dreamed of doing these things from your very own stretch of shoreline, give Kevin a call, because he can talk lakefront living – in all of its wild fun, peaceful solitude and vibrant beauty – all lake day long.