Location, purchase choices, as well as vacation and investment plans rank high among homebuyers looking to purchase real estate as an investment or as a holiday home. According to a study by the National Association of Realtors, 72 percent of vacation property owners and 71 percent of investment property owners believed that now was a good time to buy. When it came to utilizing their investments, 30 percent of those with vacation properties and 32 percent of those who had bought a home as an investment said that they planned to rent them in 2018, the NAR study revealed.
The location for both types of buyers was a top priority with 34 percent of investors purchasing homes in a suburb, 24 percent in a small town and 19 percent in an urban area, the report said. On the other hand, buyers who bought vacation homes preferred resort or rural areas. Around 33 percent of vacation buyers picked a beach area, while 21 percent preferred the lakefront and 15 percent, the countryside for their homes.
Single-family homes were also high on their preference list with 63 percent investors and 52 percent vacation buyers purchasing detached single-family properties. They also preferred paying in cash, the report found, with 42 percent investors and 39 percent vacation buyers paying all cash for their purchase.
When it came to utilizing their properties, 49 percent of vacation homebuyers planned to use it as a family retreat, while 45 percent investors purchased with the intent of generating income off their investment through renting the property. A much smaller number of vacation buyers, 6 percent, looked at buying their vacation home with the intent of generating income through renting it out.
The study also found that 24 percent of those with investment properties rented it in 2017 as a short-term rental compared to 25 percent of vacation property owners. Looking at the future though, more people buying a vacation home are looking at renting it out in the short term with 30 percent of those with such properties saying that they would rent them out in 2018, against 32 percent of owners who bought property as an investment.