The following information is provided by the Center for REALTOR® Development (CRD).
Is every second home an investment? The distinction between a second home purchased as a vacation retreat or as an investment can sometimes blur, and intended uses overlap. About a quarter of vacation-home buyers expect to rent their properties and close to a third view the purchase as a good investment opportunity. On the flip side, a similar number of investors intend to use their investment properties as a vacation retreat for family.
In addition to overlapping intentions, buyers’ uses of properties may change as they progress through life stages. For example, during the years when a buyer is working or raising a family, a vacation property may be used for only a couple of weeks out of the year and rented the rest of the time. When buyers reach retirement age, they convert the investment properties to retirement residences.
What does this mean for the real estate practitioner? In popular resort areas, a second-homebuyer’s interest is seldom strictly investment or vacation. Although one viewpoint will probably outweigh the other, both family enjoyment and investment potential influences the purchase. A buyer may express an initial interest in a vacation property, but the practitioner must be able to help the buyer evaluate the investment value of properties, too.
Realtors Property Resource® (RPR®) provides investment analysis tools that help second-homebuyers make informed choices, especially when potential rental income is a decision factor.
RPR’s Valuate® is a web-based financial analysis and marketing tool for the purchase and sale of commercial and residential investment properties. Valuate allows real estate practitioners to perform real-time, interactive investment analyses in a collaborative work environment—one that leads to more insightful, impactful and efficient conversations with prospects and clients. Its analyses can be exported to an Excel® spreadsheet to fine-tune the data and try out various scenarios. For a quick demo of Valuate, check out this video. Learn more about RPR tools at RPR Blog.
For more education about the second-home and resort market, check out this month’s featured online course at the Center for REALTOR® Development, Home Sweet (Second) Home: Vacation, Investment, Luxury Properties, which is the educational requirement for NAR’s Resort and Second-Home Property Specialist (RSPS) certification.
For more information, visit onlinelearning.realtor.
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