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Thriving in the Resort and Second-Home Market: How Real Estate Agents Can Find Success

Written by Posted On Thursday, 21 June 2018 17:53

Within the greater, overarching real estate industry lies a separate sector that, while not as often talked about, can be just as if not more lucrative than more traditional routes: the resort and second-home market. Put simply, agents who specialize in this facet are tasked with finding homes for clients that fit into resort or vacation communities, or that act as a second home in addition to a primary residence.

 

At first thought, you might believe this venture to be a guaranteed win. After all, clients who can afford a second home usually have a higher budget which means more commission, right? Well, not always. For some, a resort or vacation getaway might simply mean a rustic hut a few blocks away from the ocean. A second home might be a fixer-upper cottage on the edge of town that the owners plan to renovate and flip for passive income. Before delving into this specialization, there are a few things to keep in mind. Let’s take a look at how to thrive in this market.

 

1. Understand it’s a niche business.

Thanks to the rise of digital, home-sharing platforms such as Airbnb, the idea of someone owning a second home isn’t as outlandish as it once was. Now, forward-thinking and tech-savvy investors are looking at these properties as income generators that they can fix up, furnish, and start renting out as soon as possible. As such, the vacation and second home market is on the rise. While some may argue that the costs to continually operate and maintain a home offset any gains made by a short-term rental, research reveals that interested homeowners are simply factoring these costs into their rental rates to ensure a profit.

 

The takeaway? This market may have been slow to build, but the interest and potential are here, and as such, it’s worth learning as much as you can about it if you’re considering making the venture as an agent.

 

2. Curate a list of reputable property managers.

Industry research reveals that most vacation home owners live at least 200 miles away from their investment destination. This means that for the most part, they aren’t physically there to upkeep the property, take care of the yard work, make sure it’s secure, repair any issues, etc. This is especially an issue if they plan to rent it out, in which case continual oversight isn’t just a nice-to-have asset; it’s required.

 

To help earn their trust and win their business, it’s helpful to have handy a list of reputable and reliable property managers in the area who can take care of that legwork for them. Keep in mind that property managers differ in the level of services they provide and the areas they cover. Take the time to learn all of your local options, then take into consideration the level of care your buyers need. Being able to match them with a supplier that’s ideal for their requirements is a great first step.

 

3. Seek properties that work for a range of life stages.

Around 20% of vacation buyers are persons who plan to convert the second or vacation home into their primary residence upon retirement some time in the future. Think of all the people you know who have plans to move to the coast once their tenure is up! With this knowledge in mind, you can look for properties that are comfortable and convenient for that age bracket, meaning features like tons of steep steps might be out.

 

At the same time, before they move in, these homeowners will likely want to rent out the property to generate an income. For instance, multiple people who are still pre-retirement may pool their resources together to buy a holiday home that they can rent among their families or to the general public. These are ideal for myriad reasons, chiefly because they can house a large number of people while also providing peace and quiet away from traditional high-rise accommodations. To that end, many homeowners opt to discover more about these properties and many may be looking for a realtor to help seal the deal.

 

As their agent, if you can find a property that is both retirement friendly but modern and accessible enough to work as a short-term rental, you’ll have earned their trust as someone who knows the area and has proven expertise.

 

4. Take the time to research regulations.

If you’re considering making the move into this sector of the real estate industry, it’s important to do your homework first. This means thoroughly understanding the local rules and regulations that surround rental and vacation property in your area. Specifically, many areas have guidelines in place to regulate the short-term rental opportunities in their community. These can range from banning the practice altogether to applying licensing systems and even collecting a transient hotel tax fee to acquire the property itself. Before you send an interested buyer to look at a property, make sure you understand any restrictions that he or she might come up against if the intent is to rent the property out.

 

In closing, the vacation and second home market is a lucrative and growing one within the real estate sector. Yet, before jumping in or changing gears to focus on this niche, be sure to understand what the average property buyer is prioritizing now so you can direct them in the right direction. Whether the intent is to move in tomorrow or rent the home out for the next 20 years, you can help steer them toward the property of their dreams, so long as you know the motivations behind the move.

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