Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"The easiest way is to consider it first as an investment property, and there you would look at two things. You would look at the annual profit you could earn by renting that property out - obviously, what you would get back in rent minus your cost. Secondly, you would look at how much the value of that property might go up each year. Now obviously, that's going to be a guess, but that's very important. So you have two benefits there to having the beach property. One is the profit you make each year by renting it. Secondly is the appreciation, the value. And what you would do is lay those out over some time period, maybe over 15, 20 or 30 years, however far you want to go, although the farther out you go, the less difference it makes. And then you would use a technique, which we can't go into here, called 'present value analysis' to convert that stream, if you will, of profits and appreciation to a single value today. And that value would be the maximum you'd be willing to pay for the property. And so you would not want to bid for the property over that, and to the extent you that can get the property for less than that maximum, it would be a good deal for you."