If you’re a real estate professional who is interested in expanding your skill set to include working with vacation home buyers and sellers, now is a great time to explore the options in your market. Read on to learn how you can grow your business with vacation home and second home transactions.
What is a Vacation Home?
The U.S. Census Bureau defines vacation homes as “seasonal, recreational, and occasional-use properties.” Pay close attention to your clients’ needs and wants – it’s vital to finding the right fit for their second home. Ultimately your location and client needs will dictate the type of properties you will work with.
Current Market Conditions
Vacation home and second home sales rose to 6.7% of the total market share in 2021 for the year. By the end of January 2022, vacation home sales were still trending upward, hinting at continued growth in the segment. While it’s still a small portion of the overall real estate market, there is great interest in owning a vacation home.
Who Purchases Vacation Homes?
Vacation home buyers and sellers are typically better prepared, having been through the process of purchasing their primary residence.
Because this is their second home, many vacation home buyers aren’t in a rush to get under contract. Being two steps ahead of the process with properties that meet their search criteria will help you attract and maintain a steady flow of vacation home and second home clientele.
What Motivates Vacation Home Buyers?
Below are lifestyle and recreation activities that may influence someone to purchase a vacation home and some of the concerns they might have as they begin their search:
- Golf courses and resorts: Well-designed golf courses can attract players from around the country who want to play the course. It’s helpful to know how much membership dues are and any area services a serious golfer might need while in town.
- Waterfront: If you plan to buy and sell waterfront property, you’ll need knowledge of riparian rights, area flood plains, and how to find out more specific details about the body of water connected to the property.
- Hunting and fishing: Homebuyers who hunt and fish and love the outdoors will want to know about the area’s game and fishing seasons, regulation of those seasons, permits required to participate, and the types of equipment that can be used.
Being new to a niche market can be intimidating, but with a little preparation you can get started on the right foot. Below are a few tips to getting yourself established as a vacation home real estate professional.
- Network Intelligently:If you’re someone who loves the lake life, consider joining the local yacht club. Working alongside community members is a great way to expand your sphere of influence and get yourself positioned as the go-to agent for all things vacation.
- Financial literacy:Homeowners who purchase a vacation home can receive tax breaks for mortgage interest and property taxes if the home is being used as a second home. Vacation home sellers can take advantage of a 1031 exchange to help mitigate capital gains taxes they could be responsible for. Understanding how these financial strategies work will come in handy.
The Bottom Line
Interest is growing in the vacation home and second home market, and you can be a part of that growth. Stay focused on your clients’ vision and your business will be rewarded with referrals.
Want to increase your knowledge and stay on top of market trends, check out the Rocket ProSM Insight Learning Center.