Much like the real estate industry's success as a sound investment in the general economy, a real estate segment is proving it's strength in one of the hardest hit economic sectors.

Domestic vacation rentals haven't been unscathed in the beleaguered economy, but as the travel industry withers, the special type of accommodation is holding its own and providing a way travelers can both save money and feel secure.

That's good news for this special breed of second home investors.

The vacation rental industry is a sizable chunk of the second home market. One in three, or 31 percent of second home owners say they use their properties as an investment or income-producing vehicle, according to "The 2002 National 2002 National Association Of Realtors (NAR) Profile of Second-Home Owners," conducted with Orinda, CA-based EscapeHomes.com and released late last year.

"Mainlaind U.S. tourist areas are seeing higher demand, in part, due to the reluctance of travelers to vacation far from their homes. As such, owners in mainland U.S. vacation destinations such as San Diego, Cape Cod, Utah, are experiencing high occupancy percentages, while those further away destinations, such as Hawaii and Europe are seeing a dramatic decrease in occupancy," says Tony Berkman, publisher of VacationRentalOwner.com a Web-based network of owners of vacation rental homes.

"Overall, the vacation rental market is strong compared to all sectors of the travel industry," said Berkman.

The evidence is largely anecdotal, but it is in line with timeshare industry statistics -- 91 percent of time share owners will continue to travel over the coming year in spite of war time circumstances, according to the American Resort Development Association (ARDA) a timeshare industry trade group.

There's a heightened sense of security in a single-family home or smaller condo complex when compared with the high profile of large hotels and large resorts.

The vacation rental market has also seen a boost because renting before buying is a tactic second home buyers use to check out potential second home communities.

"The strength of this rental market is also a precurser to the whole aspect of recreational/vacation living becoming a factor in people's lives. Renting is the first step to purchasing," said Clark Thompson, CEO of EscapeHomes.com, an online second home portal that matches second home buyers and sellers with real estate professionals called Resort Specialists as well as affiliated segments of the second home industry -- vacation, resort, retirement and time share homes -- both for sale and for rent -- in 275 cities nationwide and 20 countries.

"Remember it has been two years now of intense media coverage of this growing second home investment market. The mood is catching on and the cocktail party circuit includes discussion about investing outside the normal stocks and bonds venue," Thompson said.

A new magazine spawned by growth in the second home market, "2nd Home Living," has also seen signs of growing interest in vacation rentals.

"I have seen a lot of activity from advertisers with second homes to rent, as well as sell. Some folks who in past years didn't want the hassle of renting their properties when they weren't there are putting their places on the rental market to see if they can make them (the homes) pay their own way," says Warren Maus, president of Maus Media the magazine's publishing company.

"I think there continues to be more and more interest in second-home ownership. For the moment, that bodes well for timeshares and rentals, who can take advantage of the try-it-before-you-buy-it attitude out there. Folks can spend a few weeks in a rental at the Lake of the Ozarks this year to see if it's a place they might want to look to buy," Maus added.

Published: April 10, 2003

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.