One of the great things about being an agent is that not only do you get to help your clients achieve their dreams, you get to live vicariously. If they’re looking for a vacation home on the Central Coast, you’re looking for a vacation home on the Central Coast, at least until escrow closes and reality reasserts itself.
The following is from Coldwell Banker’s Market Watch, and it’s worth sharing. I’ll add that buyers looking for an income-generating vacation home should always check to see if HOA, municipal or county regulations allow “transient tenancy”, typically tenancy for less than a month. Even those that do may have restrictions.
“The arrival of summer is always a popular time to scout for the perfect vacation home, whether it be in the mountains or near the beach. Many people dream about purchasing a vacation home and there are many benefits to owning one. Not only can the home serve as a family retreat, it can also serve as a dream home for eventual retirement. Additionally, vacation property owners who are open to renting their properties during peak season will often discover that the rental income generated can help offset the cost of the mortgage.
In the recently published National Association of REALTORS® (NAR) 2017 Investment and Vacation Home Buyers infographic, 42 percent of vacation home buyers plan to use their property for vacations or as a family retreat. The same chart shows that 37 percent of investment property buyers purchased to generate income through renting the property.
Given the rising popularity and availability of online resources for owners to manage short-term and long-term property rentals throughout the country, it’s no surprise that there was increased interest in purchasing second homes in 2016. According to NAR, 44 percent of investors, and 29 percent of vacation buyers, did or tried to rent their property last year and plan to do so in 2017 – saving them hundreds or thousands of dollars.
Regardless of the reason, over the decades owning a second or more homes has typically generated income because real estate offers a tangible asset that appreciates with time, and offers many tax and practical advantages. You can’t live in a mutual fund, stock or bond, but you can live in a vacation property whenever you want or need to.”