Beach Rental or Richmond Rental? How to Choose Your First Investment Property in Richmond, VA

Curt Reichstetter

Oct 26

9 min read

September is quiet at the Outer Banks, which is exactly why Heather and I like going. One year we did what real estate people always seem to do on vacation: we started running the numbers on a beach house.

The first number told the story. A hundred and forty thousand dollars down before you've bought a single beach towel, and before the first renter ever books a week.

I'm Curt Reichstetter with Two Dog Realty. Back home in Richmond, we had just listed a duplex in the Fan. Two front doors, two units, one building. Heather and I call both of those houses investment properties. But a beach rental and a Richmond rental make money in completely different ways, and the right one for you depends on what you want that money to do.

THE SHORT ANSWER

A beach vacation rental pays you by the week, depends on the season, and doubles as a family getaway, which makes it a lifestyle purchase with an investment attached. A Richmond long-term rental pays you by the month on a lease, usually for a year, and its main risk is the tenant and vacancy. Choose based on your plan for the money.

How does a beach vacation rental actually make money?

A beach rental gets paid by the week, and only for the weeks somebody books. That's the part the purchase math doesn't show you.

Your season depends on two things you don't control: the weather, and how many other houses are competing for the same vacationers. The quiet stretch that makes September so nice for a visit is the same stretch that means fewer bookings for an owner.

A vacation rental also has to be ready for guests. That means furnishing it, and it means someone has to turn the house over between stays, every week of the busy season. Before you buy, ask a local vacation rental manager for the actual booking history of the house you're considering, not a projection, and find out what they charge to run it.

What happens to the numbers when your family uses the beach house?

This is the upside Heather loves, and it's real. If your family gets to spend a few weeks a year at a house you own, that's worth something you can't put on a spreadsheet.

Just be honest with yourself about the trade. Every week your family is there is a week nobody's paying you. That's why I describe most beach houses as a lifestyle purchase with an investment attached. That can be a perfectly good reason to buy, as long as you call it what it is and you can carry the house through a slow year.

How is a long-term rental in Richmond different?

A long-term rental here in Richmond is a whole different animal. Your tenant signs a lease, usually for a year, and pays rent every month.

Management usually costs less, for a simple reason: nobody's turning the house over every Saturday all summer. You're not furnishing it, and you're not marketing it week to week.

Your risk moves, though. At the beach, you worry about the season. In Richmond, you worry about the tenant and the vacancy. One good tenant who stays three years is worth more than squeezing out the highest possible rent.

And you still need money set aside for the water heater that quits and the month the place sits empty between tenants. In Virginia, most residential leases are governed by the Virginia Residential Landlord and Tenant Act, so if you plan to manage the property yourself, learn the basics or talk with a property manager or real estate attorney before your first lease.

Beach rental vs. Richmond rental at a glance

	Outer Banks vacation rental	Richmond long-term rental
How you're paid	By the week	By the month
Lease	Weekly stays	Usually one year
Main risk	The season	The tenant and vacancy
Family use	Yes	No
Turnovers	Every booked week in season	Between tenants
Management	More hands-on	Usually less, with no weekly turnover
Whose rules	North Carolina's	Virginia's
Best fit	A family that wants a getaway and can carry a slow year	Someone who wants steady income with fewer moving parts

Is a duplex a good first investment property?

For a lot of first-time investors, yes. If you've never owned an investment property, a duplex like the one we listed in the Fan is a great place to learn.

Here's how it works. You live in one unit and rent the other. Because you live there, you may qualify for an owner-occupant loan with a smaller down payment than an investor loan. Your tenant's rent helps cover your mortgage. And you find out what being a landlord really takes while you're living under the same roof, where it's easy to keep an eye on things.

Owner-occupant loans come with rules. You generally have to intend to live there as your primary home, and every lender and loan program handles rental income a little differently. Bring a lender in before you start shopping so you know exactly what you qualify for. Here's how to choose the right mortgage lender in Richmond.

I'd much rather you learn the landlord lesson on one duplex than on a beach house with a hundred and forty thousand dollars down.

THE PRACTICAL LESSON

Before you fall in love with the view, write down your plan for the money. If you want steady income with fewer moving parts, look closer to home. If you want a place your family will love and you can carry it through a slow year, the beach can make sense. Either way, run the numbers first, and keep a reserve for the repair and the empty month you didn't plan on.

What should you ask before buying either one?

Before you buy a beach rental:

What has this specific house actually booked in each of the last few seasons?
Who will manage turnovers and guest issues, and what do they charge?
How many weeks will my own family realistically use it?
Can I carry the mortgage, insurance and upkeep through a slow season?
What do insurance, including flood and wind coverage, cost for this address?
What local rules and taxes apply to short-term rentals there?

Before you buy a Richmond long-term rental:

What will it realistically rent for, and how long do similar homes sit empty between tenants?
How old are the water heater, HVAC and roof?
How much will I keep in reserve, and where?
Will I manage it myself or hire a property manager?
Does my insurance policy fit a rental? A homeowners policy and a landlord policy aren't the same thing.
What city or county requirements apply to rentals at this address?

For more on coverage, see Flood Insurance in Richmond, VA and Homeowners Insurance in Richmond, VA.

How do you decide which one fits you?

I always come back to one question: what's your plan for it?

If your plan is steady income with fewer moving parts, look closer to home. A Richmond rental is a short drive away, it earns every month a tenant is in it, and the risks are ones you can see and plan for.

If your plan is a place your family will love for years, and you can comfortably carry it through a slow season, the beach can make sense. Just don't buy it expecting it to behave like a rental in Richmond.

Either way, run the numbers before you fall in love with the view.

What we do before you make an offer

When someone tells me they're thinking about a first rental, we don't start with listings. We start at the kitchen table with your plan for the money, how much cash you want to keep in reserve, and how hands-on you want to be as a landlord. Then we bring a lender in early, so you know whether an owner-occupant loan is on the table, and we look hard at the age of the major systems before you fall for a property. If the numbers don't work, we'll tell you. Sometimes the best investment advice is to wait.

The Richmond side of the story

Duplexes come up regularly in Richmond's older city neighborhoods, and the one we listed in the Fan is a good example of what a first investment can look like: two units, two front doors, and a tenant whose rent helps carry the mortgage. If you're curious what's available in your price range, or whether a two-unit home makes sense for your situation, that's a conversation worth having before you start touring.

Key Takeaways

A beach rental pays you by the week and depends on the season. A Richmond rental pays you by the month and depends on the tenant.
Every week your family uses a beach house is a week nobody's paying you. Most beach houses are lifestyle purchases with an investment attached.
Long-term rentals usually cost less to manage because there's no weekly turnover, but the risk shifts to the tenant and vacancy.
A duplex where you live in one unit and rent the other can be a smart first investment, and you may qualify for an owner-occupant loan.
Keep reserves for repairs and empty months, whichever property you choose.
Start with one question: what's your plan for it?

Frequently Asked Questions

Is a beach house a good investment property?

It can be, but it's usually a lifestyle purchase with an investment attached. A beach rental earns only in the weeks that book, its season depends on weather and competition, and every week your family uses it is a week it isn't earning. It makes the most sense for a buyer who wants a family getaway and can carry the house through a slow year.

What's the difference between a vacation rental and a long-term rental?

A vacation rental is rented by the week to short-term guests and needs to be furnished and turned over between stays. A long-term rental is leased to one tenant, usually for a year, who pays rent monthly. The vacation rental's main risk is the season; the long-term rental's main risk is the tenant and vacancy.

Can I buy a duplex with a smaller down payment if I live in one unit?

Possibly. If the duplex will be your primary residence, you may qualify for an owner-occupant loan, which often requires less down than an investor loan. Program rules vary, so talk with a lender before you shop to confirm what you qualify for and how they treat rental income.

How much money do I need to buy a beach rental?

It depends on the price, the loan, and the lender. In the Outer Banks example from our episode, the down payment alone was $140,000 before the first booking. Second homes and investment properties typically require more money down than a primary residence, and you'll need cash for furnishings and reserves too.

What's the biggest risk of owning a long-term rental in Richmond?

The tenant and the vacancy. A tenant who doesn't pay or doesn't take care of the home, or a stretch with no tenant at all, is where most of the risk lives. Careful screening, a well-maintained property and a cash reserve help you ride out both.

Should I let my family use my vacation rental?

That's a personal choice, and for many families it's the whole point. Just plan for it honestly: each week your family uses the house is a week you're not collecting rent, so build those weeks into your numbers before you buy.

Do I need different insurance for a rental property?

Usually, yes. A standard homeowners policy is designed for a home you live in, while rentals are typically covered by a landlord or dwelling policy, and short-term rentals may need coverage written for that use. Coastal homes also raise flood and wind questions. Talk with a licensed insurance agent before you buy.

What laws apply to renting out a home in Virginia?

Most residential leases in Virginia fall under the Virginia Residential Landlord and Tenant Act, which covers things like leases, security deposits and repairs. Cities and counties may have their own requirements too. If you plan to self-manage, review the basics or consult a property manager or real estate attorney before signing a lease.

Does Virginia law apply to a beach house in the Outer Banks?

No. The Outer Banks are in North Carolina, so North Carolina's rules for vacation rentals, taxes and licensing apply there. If you buy across the state line, work with professionals who know that market.

Does Two Dog Realty work with investors?

Yes. We help investors evaluate property condition, neighborhood fit, practical ownership issues and rental considerations throughout the Richmond area. And we're straightforward when a deal doesn't make sense.

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Thinking about your first investment property in Richmond?

If you're thinking about buying your first investment property in the Richmond area and want to make sure you're not just chasing the view, but buying the kind of income that fits your plan, book a strategy call. I'd be glad to help you build a smart plan from the start.