When people dream of vacation homes, oftentimes they cut themselves off quickly, thinking they would never be able to afford one. However, new research by the National Association of REALTORS® shows that is probably not the case.
- While vacation homes are obviously a big investment, they aren’t out of reach for those under the six-figure salary mark.
- According to NAR’s 2015 Investment and Vacation Home Buyers Survey, the median household income for those who own a vacation property is $94,380, only about $15,000 more than the median income for those who own their primary residence ($79,650).
- And if you thought buyers needed cash to buy it, think again—70 percent of vacation homes purchased last year were financed with a mortgage.
Among vacation buyers, 22 percent purchased in a resort area and 19 percent purchased in a small town higher than other buyer types. Forty percent of vacation buyers purchased in a beach area, 19 percent purchased in the country, and 17 percent purchased a vacation home in the mountains. The typical vacation property was 200 miles from the buyers’ primary residence, while the typical investor property was 24 miles from their primary residence. The typical investment buyer plans to own their investment home for five years
Optimism and the Future
Buyers of primary residences, vacation homes, and investment properties were active in the market despite hurdles they may face with low inventory and tight financing. More than 80 percent of vacation buyers and investment buyers reported that now is a good time to purchase real estate. Sixty-eight percent of investment buyers are likely to buy another investment property, and 49 percent of investment buyers are likely to purchase a vacation property in the next two years. Similarly, 66 percent of vacation buyers are likely to purchase an investment property and 58 percent are likely to purchase another vacation property in the next two years. Among primary residence buyers, 41 percent are likely to buy an investment property and 45 percent are likely to buy a vacation property in the next two years.
At popular all-inclusive resorts like Cinnamon Shore Mustang Island on the Texas coast, the rentals are so strong they pay the mortgage.