Thirty-nine percent of homes were purchased for secondary vacation or investment purposes last year, according to the “2013 NAR Investment and Vacation Home Buyer’s Survey.” This accounts for a 10-year high for the secondary or resort home purchase market.
This data indicates that REALTORS® serving higher-net worth individuals and/or vacation home markets have unique opportunities to drive increased business. Agents who know the differences between why individuals purchase homes for vacation vs. investment purposes will increase their opportunities to close deals in these niches.
Personal Vacation Home Targets
No matter what type of home buyer your client(s) may be, everyone wants to secure a property that maximizes long-term value in a community they like with amenities they enjoy. However those who purchase vacation homes for personal use have the luxury of being incredibly selective about the things they want in a home. These individuals do not have to own a second home after all to put a roof over their heads.
Proximity to fun amenities such as waterfront access, shopping and activities for children become super important to vacation home buyers. Another key factor is the distance between a vacation home and the buyer’s primary residence. According to a REALTOR® Magazine article, “Vacation Home Buyers Stay Close to Home,” the median distance to a vacation home is 305 miles. Buyers like being located within reasonable driving distance to their vacation home, which cuts down on travel costs and time commitments. It also increases overall usage and makes it easier to track ongoing maintenance needs in person.
Investor Vacation Home Targets:
Many investors choose to purchase vacation homes for non-personal use. This brings a few different characteristics to the buying process. Investors typically do not plan on using the house for vacation destinations; rather, they seek to cover ongoing mortgage and maintenance expenses through rental income. Eventually they seek to sell the property outright after enough equity has been gained and the property itself has increased in overall value.
Accordingly, investor buyers will want assurance that a vacation home is located in a community that will be a popular destination point for renters. They will also want to know how many other comparable properties are nearby and being offered as rentals. These factors are what drive the price of fair market rental rates and volume during peak and non-peak seasons. Costs to maintain the property will be very important too, particularly if amenities such as access to boat docks, beach beaches and golf courses are part of the deal. These expenses, on top of general property maintenance, can add up to a point where owning an investment vacation home becomes a money-losing proposition.
Network Marketing and Other Tips:
Networking with other brokers will be one critical marketing tactic needed for success in this niche. If you have secondary vacation home listings you need buyers and chances are they are not typically within your current geographic network. The inverse is true for brokers serving high-net-worth clients who may be looking for vacation home inventory outside your area of focus. Brokers who represent either one of these demographics will have much more success when they network with each other when compared to those who do not.
The National Association of REALTOR’S® “Field Guide to Vacation, Resort, and Second Homes” is a great place to learn more about this promising niche market. The site contains numerous resources educating brokers about both personal-use and investor vacation home buyers and how to best address them to grow your business. Or earn a Resort and Second-Home Property Specialist (RSPS) Certification. The RSPS Certification allows buyers and sellers to have confidence in the ability of a REALTOR® who specializes in buying, selling or management of properties for investment, development, retirement, or second homes in a resort, recreational and/or vacation destination, to assist them with their search.
How have you secured new business leads and closed deals with personal use and investor vacation home buyers? Please share your success stories in the space below.