(MONEY Magazine) – Cecelia Bonifay and her husband Greg Presnell always wanted a house on the water where they could indulge their love of fishing and sailing. Now they walk out of their three-story contemporary home on Gasparilla Island in southwest Florida to a semiprivate dock, hop on their boat and scour the nearby mangrove islands for snook and trout.

Living near the water is the closest many of us will get to paradise on earth. Many of the rewards are personal, of course, but others are financial. Coastal properties have appreciated at an average annual 7% rate over the past 50 years, according to a federal study. A waterfront property is worth from 8% more (on the Gulf) to 45% more (around the Great Lakes) than a comparable inland site.

But let's face it, the supply of ideal places to live on the coast is limited. Unregulated development has marred the beauty of some areas; in others the economy is too closely tied to tourism to support the good life year round. Perhaps there's too much summer traffic--or too many winter storms. And prices are steep.

Where should you look for your spot on the shore? On the next few pages, the editors of our sister publication Coastal Living recommend the most livable places in seven regions. But first, here are seven steps to take before you buy.

--Learn the language--and read the fine print. "Ocean view" does not mean "oceanfront," as one retired California couple discovered. They purchased what they thought was a dream home on a beach in North Carolina. Weeks later, bulldozers started tearing up the earth between them and the sea for the actual oceanfront house. Some lenders have stopped requiring surveys, but order one anyway to protect yourself.

--Find out whether the beach is public or private. If the beach is public, you can't stop people from setting up umbrellas and lounge chairs right in front of your home.

--Check out building restrictions. Ask local and state governments about height limits, setbacks and wind-resistance rules. Learn the environmental laws; you may not be able to build in areas that contain protected wildlife. At Cecelia and Greg's home, the state requires water-quality tests annually. If your heart is set on a boat dock, make sure you'll be able to install one; you may have to lease underwater land from the state and acquire permits from several agencies. Check tide charts and bridges to make sure you can get to your property by boat at all times.

--Guard your investment. Choose a property that's relatively safe from erosion and storm damage. Houses above the 100-year flood level and those with a seawall, for instance, are worth more than unprotected properties. Other factors affecting value include a beach renourishment program and the distance of the houses from the water. Finally, buying in an area that encourages recreation can pay off because of a greater demand for rentals.

--Talk to a builder before you buy. Coastal homes need to withstand the elements, which often means stronger (and pricier) building materials and specific design elements, such as rounded rather than angular corners. Restrictions on sewer systems and septic tanks may dictate the size of the house you can build. Having to truck heavy machinery and materials to an island or remote waterfront location will add to costs. Consult a builder with experience in coastal houses. If you're purchasing an older home, have a structural engineer determine how vulnerable it is to storm damage. Then, no matter how old the construction, have your home inspected regularly for signs of corrosion.

--Plan for maintenance. Salt air is tough on homes, cars, fabrics--anything left outdoors. Every time you throw open those French doors onto the beach, salt spray and mildew get inside; expect to replace rugs, appliances and even mirrors more often.

--Build hefty insurance premiums into your budget. Many insurers have stopped writing homeowners policies in coastal areas because of storm losses; expect to pay more for less coverage. If a hurricane is swirling nearby, insurers will stop writing new policies until the danger has passed; that can delay closings. You'll also need flood insurance. For some Oregon oceanfront properties, that can run more than $3,600 a year, says Sue Poling, executive director of the Lincoln County Board of Realtors. Make your sales contract contingent upon obtaining insurance. Contact the state insurance department to find insurers that cover your area and assistance programs for coastal properties. Also, be aware that insurers generally won't compensate you for land lost to beach erosion.

Northeast

Portland, Maine blends an artsy feel with an urban environment. Rustic fishing docks keep it grounded. Plus, it's only a short distance to those glorious, rocky beaches. In Massachusetts, Newburyport rates up-and-coming status, with its influx of young adults and families, bustling harbor-town personality and proximity to Boston. Bellport, N.Y. is a charming town on the south shore of Long Island, closer to the city than beach towns out in the Hamptons or on the North Fork. Sandwich, Mass., on Cape Cod's quieter side, puts you on the antique-store trail. Mid-coast Maine towns such as Rockland, Camden, Wiscasset and Georgetown offer the quintessential coastal elements of lighthouses, shorebirds and fresh seafood, and throw some fine dining--and fine art--into the mix. But more rural Down East areas are less costly.

Mid-Atlantic

Annapolis' Eastport area shelters quiet residential streets, excellent restaurants and sailors' hangouts. Cambridge, Md. is emerging from an economic slump, thanks in part to the new Hyatt Regency resort. Fun shops and restaurants are opening downtown, and some of the waterfront residential areas are lovely. In Norfolk's Ghent neighborhood, grand old homes preside over tree-lined streets, and wonderful restaurants, shops and galleries share patrons with the superb Chrysler Museum of Art. The Ocean Grove/ Asbury Park/Bradley Beach area of the Jersey Shore appeals to both families and singles, and housing bargains are still available. Lewes, a surprisingly historic town in Delaware, contains beaches as well as charming (and quiet) residential neighborhoods.

South Atlantic

On North Carolina's Outer Banks, the town of Duck complements its laid-back beachfront feel with superb dining. Also in North Carolina, the mainland shore of Pamlico and Albemarle Sounds may offer the country's most overlooked combination of small-town relaxation and coastal character; Oriental, Elizabeth City, Edenton and Washington boast big, beautifully tended old houses. Other towns that deserve attention include Georgetown and McClellanville in South Carolina, Brunswick in Georgia, and New Smyrna Beach, Cocoa Beach, Sebastian, Vero Beach, Stuart and Delray Beach in Florida. Beaufort, S.C. is an equally historic, but more affordable, alternative to Charleston and Savannah.

The Great Lakes

Wisconsin's Door County (the tip of the peninsula that jabs into Lake Michigan just east of Green Bay) boasts a quiet pace, water everywhere, farm-fresh produce, the camaraderie of traditional fish boils and more lighthouses (10) than any other U.S. county. New York's lovely Lake Ontario coast provides easy access to the excellent wineries of the Finger Lakes region. The rugged, adventurous North Shore of Lake Superior offers scenic beauty, year-round outdoor activities, excellent resorts, even an art colony in Grand Marais, Minn. On Michigan's west coast, the lushly green town of Saugatuck brims with public art and interesting shops, and features glorious sunsets at Oval Beach. Of the large cities, Chicago exudes energy, Toronto, a relaxed attitude and diverse cultures.

California

Mendocino, a small and historic arts community, perches on dramatic headlands about 150 miles north of San Francisco. Benicia, once the state capital, is a strong, family-oriented community between San Pablo and Suisun Bays, near San Francisco. Half Moon Bay, nearly equidistant from San Francisco and Monterey, boasts great outdoor activities. Pacific Grove pulls off a down-to-earth atmosphere in the posh Pebble Beach area. In Santa Barbara, you'll find notable scenery, architecture, wine and food, plus a Mediterranean way of life. Catalina Island entices those seeking a sense of international living close to home, while Laguna Beach offers an active and involved community life in a beautiful setting.

Pacific Northwest

With a population of some 30,000, Juneau, Alaska isn't a big city. But as the state capital, it straddles the urban and wilderness worlds. Ferries along the Alaska Marine Highway give access to other Inside Passage communities and beyond. Another state capital, Olympia, Wash., makes a great residential anchor for exploring the surrounding land and waterways; outside your back door, you can hop in a kayak and paddle up through Puget Sound, spend a Sunday brunch downing tasty Olympia oysters or enjoy an easy hour's drive to Seattle. Almost dead-center on the Oregon coast, Florence is less crowded than some of the beach towns to the north. It has reasonably priced real estate and serves as a handy home base for adventures along the entire coast.

Gulf of Mexico

Dunedin, Fla. may be the Tampa Bay area's best-kept secret. Just north of busy Clearwater, Dunedin shares the same beautiful waterfront, with far fewer tourist traps, plus a Main Street reminiscent of Mayberry. Honeymoon Island State Park boasts spectacular beaches, and the Pinellas Trail, a 34-mile route through town, gives locals a reason to explore the area by foot or bicycle. Pass Christian, Miss. is a second home to many New Orleanians who enjoy its quiet, gracious charms. The marina appeals to water lovers, and friendly citizens lure those for whom a tight-knit community is important. Antique shops, a few impressive restaurants and a growing arts community add to this town's appeal. Rockport, Texas thrives with culture, attracting artists to this seaside town northeast of Corpus Christi. A favorite stomping ground for snowbirds, Rockport draws wildlife lovers and boaters alike. The town, one of the more scenic coastal communities in Texas, gives transplants many waterfront housing options, from canal-side to Gulf-side.