If paradise calls, should you answer?
Vacation homes carry an undeniable allure for clients, but there are plenty of reasons for real estate agents to get in on the action, too. 16% of all homes sold in 2015 were leisure properties, equaling about 920,000 transactions. With that slice of the market share up for grabs, it can be tempting to charge headfirst into the second-home business.
But before diving in, test the waters to make sure you're set for success.
Learn the Local Charm
Specializing in vacation home transactions can give you a strong professional advantage, but it may not be a wise time investment if you work in an area where getaway properties aren't in demand.
Clients typically live about 200 miles away from their vacation house, so it's almost a necessity to be an expert in the community where your prospect hopes to set up their dream retreat. You'll need to know the ins and outs of the local landscape, as the client may be less informed than someone buying a residential home.
And if you're wondering whether your market is in hotspot vacation properties, here are a few stats on the leisure homes sold in 2015 to point you in the right direction:
- 47% were located in southern states.
- 40% were located near a beach.
- 27% were located in a resort area.
- 25% were located in western states.
- 19% were located near mountains.
- 19% were located near a lakefront.
There's one more fact to consider: while 88% of overall homebuyers made their purchase through an agent or broker, only 52% of buyers bought their vacation home through a real estate professional.
You need to convince clients to work with you, and developing expertise within attractive communities can go a long way.
Know the Client Profile
The mindset of someone looking to buy a leisure house is much different than that of a residential buyer. A vacation property is much more than a shelter on a plot of land—it's the actualization of a fantasy. You aren't selling a home; you're selling a dream.
It's important to play up the property in its ideal form. Exterior photos should showcase the home in whatever seasons make it look most flattering, and interior shots should highlight rooms adorned in thematically appropriate décor.
Securing a vacation home is far less urgent than purchasing a primary residency, so don't be surprised if it takes longer before a prospect is mentally ready to finalize the transaction.
Don't rush any potential buyers. Instead, be patient and use the timespan to develop friendly relationships. It could serve you well in the long run, as 47% of vacation property buyers say they're at least somewhat likely to consider purchasing another recreational home within the next two years.
Renter Beware
Though owners primarily use vacation homes for personal recreation, about 40% express interest in renting them out for a small part of the year.
Unfortunately, it can be easy to underestimate the amount of work involved in renting. It's far from the free money scenario many people picture.
For those who own a primary residency dozens or hundreds of miles away, working with a property management company is a must. Be sure to have some reputable organizations in mind, so you can make quality recommendations.
Here's another factor: Spikes in rental demand occur during holidays, a time when buyers most often hope to use their vacation homes!
And don't forget the furnishings. Renting out a property requires the owner to be comfortable with complete strangers having access to every item within their second home. This can lessen the feelings of intimacy and security many people look for in a recreational property, and it's something not everyone realizes upfront.
Renting can still yield positive results, but it's important to talk through every angle with your prospects so they can make an informed decision.
Home Is Where the Heart Is
Though there can be unexpected challenges when dealing in leisure properties, it can still be a worthwhile venture. If your heart is invested in developing the expertise required to be successful, you can elevate your professional services by becoming a true asset to clients searching for vacation homes.
This article is for general information purposes only.
CITATIONS
"Investment & Vacation Home Buyer's Survey 2016." National Association of REALTORS®, April 2016. Web. 13 December 2016.
"2016 PROFILE OF HOME BUYERS AND SELLERS 35th Anniversary Edition." National Association of REALTORS®, October 2016. Web. 13 December 2016.
Kerby, Justin. "Tips to Succeed at Selling Vacation Homes Online." Inman. N.p., 7 October 2015. Web. 13 December 2016.
Lafontaine, Cameron. "Vacation Rental vs. Investment Property." Tripping. N.p., 15 January 2016. Web. 13 December 2016.
Bayer, Heather. "Shift Your Mindset When Selling to Vacation Rental Buyers." Inman. N.p., 17 February 2015. Web. 13 December 2016.
De Vita, Suzanne. "The Secrets to Selling a Second Home." RISMedia. N.p., 2015. Web. 13 December 2016.
Thorsby, Devon. "How to Think Like a Luxury Real Estate Agent When Selling Your Home." U.S. News & World Report. N.p., 7 July 2016. Web. 13 December 2016.