POPULARITY OF VACATION / INVESTMENT HOMESJuly 3, 2008
It might surprise you to learn that a third of all homes sold during the past year were second homes – those to be used as a vacation residence or investment property. This was revealed in the “2008 Investment and Vacation Home Buyers Survey,” conducted by the National Association of Realtors. The survey showed that 12 percent of home sales were vacation homes, while 21 percent were purchased for investment purposes.
Even in a generally sluggish sales market, the appeal of owning a private vacation home is strong. It provides a get-away retreat from the stresses of a busy work and home life.
“Vacation home purchases are largely tied to lifestyle consideration,” it was noted in the NAR report. “Households seek to own an additional home in a desirable destination.”
Other buyers see the current market as an opportunity to acquire homes as investments, sometimes at below-market bargain prices. The purchase of a home for investment is a dollars-and-cents decision resting in part on current cash flow from rental income and expectations of future profit gains. The motivation to buy investment homes is partially driven by investors seeking to diversify their assets and generate income.
Check with your loan officer to see if and how this may apply to your loan.