Serving the vacation rental market requires a real estate professional who is equal parts of local data expert, business consultant, and short-term rental industry expert.
Thanks to the sharing economy, vacation rentals are a fast-growing sector in the real estate industry. Vacasa Real Estate recently conducted a study of 721 prospective vacation home buyers, which yielded some unexpected insights.
About one-fourth of vacation home buyers will buy a property sight unseen, according to the report. Whether or not they are willing to buy property from a distance, vacation home buyers place more importance on finding an agent with local market insights, than do typical buyers who might seek agents with negotiation skills and customer service. It is also helpful to have expertise on short-term rental business knowledge and zoning restrictions said the report.
“Many buyers are choosing vacation rentals over other investments because of the potential for higher returns and flexibility to use the home,” says Shaun Greer, Vacasa’s senior director of real estate. “The opportunity for agents lies in that the majority of prospective buyers have not yet chosen an agent or broker as their partner in selecting the best vacation rental for them.”
Because they’re often buying a second home as an investment, these buyers will rely on real estate agents to provide data like custom rental projections, cap rate, expert insights into short-term rental regulations, says Greer.
Buyers of investment vacation properties prioritize the revenue they can generate now over long-term equity potential.
“Agents should be sure to provide tools to help them accurately estimate that revenue,” says Greer.
That said, buyers focusing primarily on return on investment varies by age. Vacation rental buyers’ priorities change sharply in their mid-50s, according to Vacasa’s research. Agents who are working with buyers in this age range can help them clarify their current and near-future intent.
While vacation homes are a more common investment than what the general public perceives, about three-quarters of these buyers are middle- to upper-middle class. One thing that they have in common is what they seek in a property: tranquillity.
“Vacation homes that deliver peace and privacy appeal to more buyers and guests,” according to Vacasa, “increasing revenue potential and making the property easier to sell down the road.”