If the trailer for Disney’s new live action “Beauty and the Beast” gave you the fairytale goosebumps, you’re going to love this. Between now and March 31, you can enter to win a magical stay at castle in Scotland, courtesy of HomeAway.
The vacation home market is estimated to be at $100 billion worldwide. In New Orleans at NAREE this month, I gathered five top vacation home experts, including Bill Furlong of HomeAway, Jackie Doak of Dart Enterprises Ltd., the developer ofCamana Bay on Grand Cayman Island, Hunter Harman, Broker/Owner of Berkshire Hathaway HomeServices Beach Properties of Florida, Tina Necrason of Montage Hotels & Resorts, and Tyler Niess of Crescent Communities.
Learn from the experts on what is hot in the vacation home market, and see the whole panel discussion from the National Association of Real Estate Editors 50th conference, after the jump!
If Paris is the city of love, then the Eiffel Tower is one of the most romantic landmarks in the world. Lots of people get engaged there, but what if you could do that, or renew your vows, in an Eiffel Tower apartment?
Vacation rental website HomeAway has partnered with architect Benoit Leleu to design a temporary and totally fabulous apartment inside the Eiffel Tower. They’re running a contest, called the HomeAway LoveAway sweepstakes, which ends tonight at midnight.
The winning couple will receive an all-expense paid trip to Paris, including four nights, June 30 through July 4, in a romantic HomeAway apartment in the heart of the city. On July 2, they’ll join other romantics at a party in HomeAway’s Eiffel Tower Apartment, which was built inside the tower as a temporary space for only one month. Kaitlyn Bristowe and fiancé Shawn Booth from ABC’s The Bachelorette are co-hosts with HomeAway and will celebrate their engagement at the LoveAway event.
This is the first time in history the tower has had an apartment built inside and it’s marvelous!
With the economy on the upswing, better interest rates, and stock market gains, vacation homes and second home purchases are booming. By the lake, in the mountains, near the cost, in the desert — there are tons of great locations with plenty of fantastic properties. And sometimes a second home can actually make you money.
Do you occasionally rent out your vacation home? Services such as VRBO, HomeAway, and Airbnb are increasing in popularity, sometimes becoming a reliable second income stream for homeowners. Oftentimes the cost of maintaining these income-producing properties can be deducted. However, pitfalls abound. This report from the latest issue of Tierra Grande, the quarterly magazine produced by the Real Estate Center at Texas A&M University, spells out the particulars of how vacation homeownership can lead to a tricky situation without proper record keeping.
This is a good way to gauge where you should buy your second home if you plan on leasing it to supplement income. As you probably know, the sluggish, morose economy continues to drag down the travel industry: one publication I know ceased their entire travel section due to lack of ads. But there is one segment of the industry that is still showing a heartbeat: vacation home rentals.
That’s why 76% of current vacation homeowners think now is a great time to buy a second home. According to those gurus over at HomeAway.com, and the latest HomeAway Vacation Rental Marketplace Report (released today), more than two-thirds of owners who have vacation properties in areas where summer is the peak season reported occupancy rates of 76 percent or higher, with an average nightly rental rate of $240.67.
Looking at the average occupancy rate for the hotel industry between June and August, it was only 68 percent, with an average room rate of $101.90.
“While various segments of the travel industry are experiencing a general weakness, the latest HomeAway Vacation Rental Marketplace Report shows that rentals of vacation homes clearly experienced strong results this summer, with continued strength expected as we approach the year-end holiday travel period. In particular, the Gulf Coast region extending from Florida to Alabama bounced back this summer, perhaps more quickly than anyone anticipated. Finally, vacation rental owners are feeling confident enough about their businesses to say that now is a good time to buy a vacation home – more than three-fourths of owners polled affirmed this sentiment,” says Brian Sharples, Chief Executive Officer of HomeAway.
More than half of vacation rental owners say they spent more money on improvements to their vacation home in the past 12 months than they did on improvements to their primary residence. One-fourth of vacation rental owners say their bookings for the last four months of 2011 are higher than for the same time period last year.
Here’s the top ten markets where traveller demand is on the rise– buy here:
These are the new markets rocking and rolling for vacation home owners, go figure:
If you want to look at a market that makes residential real estate even in say, Detroit look good, look at second homes. Last year, the median price of a vacation home in the U.S. fell 11%. Compare that to what the National Association of Realtors tells us the ordinary primary residence did — fell 5 percent. This according to the group’s annual Investment and Vacation Home Buyers Survey, or almost 2000 buyers. That’s a pretty small sampling, actually. Exact figures on the number of second homeowners in this country are hard to find because no one, not even the NAR, tabulates them. (Even the Census Bureau got confused when it noted so many empty homes in Florida -duh!) Wade Shealy over at 3rdHome.com estimates there are 50 million vacation homes in the world, and ten million in the US alone. That’s lake homes, ski homes, beach condos. Still, some Realtors say the bargains are so plentiful right now, buyers are scooping up deals for $100,000 and under. And even more, people who lease their primary home are looking to buy a second home, which makes perfect sense if you live in a high-cost urban area such as New York or San Francisco.
In fact, I know contemporaries in Dallas right now who plan to do the same: lease in Dallas and make a country home their primary.
Financial experts tell us to be cautious: every home has financial implications over and above the mortgage such as taxes, maintenance, and insurance. If you have a financial reversal — job loss or illness, what would happen to your second home, particularly in a market where vacation homes are not selling overnight?
You can lease it, of course. Be prepared to dish out a management fee and suffer extra wear and tear on the home and furniture. And oh yes — I hope the scent of curry doesn’t bother you! But hey, leasing pays the bills. According to HomeAway.com, that online candy shop for vacation home rentals, 48% of vacation home owners rent out their homes to cover 75% of their mortgage.
The better the location, and lower the price, the faster the home will lease. Take a place like Carmel, CA: the week of Concours in Pebble Beach, there are zero homes available in Carmel to lease. Vacation renters want the same things you do from a second home: location — near a fun activity such as water, ski mountains, a lake or event. If ski, the closer the home is to the lifts (ski-in, ski-out), the better. Water properties should not be ten miles from the beach! You can stick near the recession-proof markets, such as Aspen and Destin, but keep in mind that, as one Martha’s Vineyard agent recently told me, rich people can afford to hang onto their second homes for longer because they have deeper pockets.
Another thing to consider when you buy: would your property appeal to foreign renters? Foreigners are buying up larger swaths of U.S. real estate as our prices plummet. It never ceases to amaze me how foreigners flock to Orlando as a destination, whereas I’d take the Gulf coast any day. Real estate is soft in Maine but the Canadians lease beach cottages there years in advance.
Proximity: most people want to drive to their second homes and think a two hour drive is just fine, thank you. Our four hour trek to the Hill Country makes me cringe, but then we get on the road and the time flies. My rule of thumb: if you are not a multi-millionaire, anything over four hours that requires air lift should be a fractional. You just are not going to use it that often.
A trend I am seeing: baby boomers buying vacation homes or sites now to use as a primary home later, post retiement. If you have a lot of equity in your home, you can sell it and use the equity to have two homes. That depends, of course, on your market and the economy.
Finally, never fall for “love at first sight”. That is, do not go somewhere, fall in love with the location, and buy on the spot. Visit the area a minimum of three times in various seasons before you sign on the dotted.