Owning a vacation home is a dream; understand the market more clearly by considering these nine key factors.
1. Market outlook: Is inventory plentiful? Are prices trending up or down? Is an area losing its cachet, or is it heating up? Be sure to do your research on local trends. Try http://Google.com/trends
3. Distance from home: The typical distance of a vacation home from an owner’s primary home was 170 miles. Some vacation homeowners find that paradise works best if it’s closer—within a two-hour drive or via a direct flight.
4. Nearby attractions: While location is still the mantra, what “the best location” means will vary. Top schools and proximity to work centers may be huge incentives for a primary home, but being on vacation may require proximity to a beach.
5. Maintenance: Whatever the home’s size and style—single-family, townhouse, or condo—buyers want to spend as little time as possible on maintenance.
6. Furnishings: Yet another way for buyers to conserve precious vacation time is to select a furnished home rather than spending time shopping, especially from a distance.
7. Amenities: Besides the location, onsite amenities can increase the appeal of one home over another. If extended family and friends regularly vacation with your buyers, encourage them to ensure they have a sufficient living space — both indoors and outdoors, depending on the location.
8. Rules and restrictions: Single-family homes may come with no guidelines, except for those the town dictates — when watering lawns is permitted, for instance. But homes in a development or condo community often have a lengthy list to obey, such as restrictions against pets.
9. Rentals: A universally appealing vacation home could add up to a revenue opportunity, and your buyers may already be factoring additional rental income into their second-home plans. However, homeowner’s associations may ban renting or restrict how often owners are allowed to rent.
Here are 6 factors to consider when investing in a second home
1. Keep costs within the budget. Advise buyers to qualify for a loan before looking, unless they pay all cash. Understand how much discretionary income they’ll need to cover the monthly mortgage, real estate taxes, assessments, regular maintenance, homeowners’ insurance, flood insurance, furnishings, a caretaker to watch the property if the owners don’t live nearby, an emergency fund for disasters and major repairs, and travel costs.
2. Determine the frequency of use. Distance will play a factor for your clients. “Driving one to two hours from Houston to Galveston is easy, but from Dallas that can mean five hours.
3. Pick the right location. What makes one vacation locale more appealing to buyers than another largely depends on the clients’ interests.
4. Understand upkeep. A big lawn needs mowing, lots of square footage means more cleaning, a pool requires maintenance.
5. Research rental potential and costs. If income is the prime motivation, buyers should know that demand and dollars fluctuate with the economy, weather, location, number of bedrooms and bathrooms, and amenities.
6. Think about resale and changing needs. Help potential home owners research sales, prices, and trends.