Selling a Vacation Home vs. an Investment Home: What are the Differences?
by Mark Bingaman
As the overall real estate market continues its rebound, buyers are becoming more and more confident with the idea of purchasing a vacation home for their own enjoyment or an investment property to instigate cash flow and/or serve as a retirement stash.
If you’re a LandHub.com seller (or intend to list property, acreage or a vacation home for sale), the numbers listed below can help you frame a better understanding of potential buyers and adjust your advertising efforts (and copy) accordingly.
While statistics are not yet available for 2016 vacation home or investment property purchases, the numbers from 2015 provide some interesting details on buyers of both types of properties.
According to a report by the National Association of Realtors, the median sales price of both vacation and investment homes spiked in 2015. The median vacation home price was $192,000, up 28.0 percent from $150,000 in 2014. The median investment-home sales price was $143,500, up 15.3 percent from $124,500.
Profile of Investment Property Buyers
Most purchasers of investment homes or properties (42%) cite rental income as their chief reason for buying land or a house, with that number increased by 5% from the previous year. As you may expect, the other most significant motivations for the purchase are low prices, good deals, and the potential for price appreciation.
The average household income for an investment home buyer is $95,800, with the most common investment home purchase (62%) being that of a detached, single-family home with a median distance of 22 miles from the buyers’ primary residence.
Owing to the rising demand for rental housing in cities, investment purchases in urban landscapes increased to 29%, although the majority of such investments (41%) are still made in the suburbs, with the southern United States the most active geographic region overall for any of these types of land purchases.
Profile of Vacation Home Buyers
The majority of vacation home buyers (58%) lay down their money for single-family homes, while the number of those interested in condos (25%) or town homes (13%) has decreased.
Beach areas (40%) are the most popular spots for vacation home buyers, followed by a mountain or lake setting (19%) and country (16%) locales.
Most buyers intend to own the property for under a decade (7 years) and plan to use it as a vacation spot or family retreat (37%) or as a retirement (16%) option. Only a smattering of folks view their vacation home purchase as a potential cash-flow property via rentals.
The South claims nearly half of all vacation home purchases (47%) followed by the West (25%), Northeast (15%), and Midwest (13%).
A quick scan through LandHub.com makes it clear that our site is loaded with plenty of great properties ideal for vacation homes and investment purchases. As consumer confidence in the real estate market continues to increase, we’re pretty happy to be in a place to help folks sell your land, and land your dream!