(NEW YORK, NY) — Vacasa, North America’s largest vacation rental company, is revolutionizing the way guests experience vacation homes, and even the way we buy and sell them.
I had the pleasure of speaking with Shaun Greer, Vacasa’s senior director of real estate, about the company’s Vacation Rental Buyers Report.
What is Vacasa and what separates it from competitors?
Vacasa launched in 2009 and is now North America’s largest vacation rental company with more than 12,000 rentals spanning 28 states and 16 countries. We hosted around 1.5 million guests in our vacation homes last year.
What separates us from others in the industry is that we are an end-to-end professional vacation rental manager, so we take care of everything for our homeowners — from marketing and booking, to cleaning and maintenance, and everything in between.
This year, almost half of all second home purchases will be made for investment purposes. Can you expand on this?
According to National Association of Realtors 2017 Investment and Vacation Home Buyer Report, 39 percent of second homes were purchased for vacation use in 2016. However, what we are seeing is that with the increased popularity of vacation rentals over hotels for travelers, as well as the ability to book homes easily online through Vacasa, Airbnb, VRBO, etc., the percentage of vacation homes used for investment purposes continues to rise.
According to Vacasa’s Vacation Rental Buyer Report, half of those currently in the market to buy a vacation rental already own at least one additional home. Given that they are back in the market for an additional or even multiple vacation homes signals to us that they are looking to capitalize on their investment.
For many of our prospective buyers, investing in a short-term vacation rental can yield solid returns. This of course assumes you’ve done your homework on choosing a popular vacation destination, factored in the home’s cap rate and are maximizing the potential of your investment by using professional property manager to rent your home.
What have you found to be the most sought-after locations and amenities for buyers?
The report found that the most popular locations for buyers are Florida, California, Texas, New York and Colorado. However according to our report, while most people have traveled to the area they want to buy in, almost two thirds have not selected the exact city where they want to buy, even if they have narrowed it down to state.
Vacation homes are all very different depending on home type and location, but in general, the most sought-after amenities for buyers to consider if they are planning to rent their vacation home as a short-term rental include a large living room and kitchen area, multiple bedrooms, a hot tub and an outdoor space.
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Are people buying second or vacation homes as frequently as previous years?
We are seeing an increased interest in second homes, both from investor buyers and those who are buying for personal use. Our report found that investor-minded buyers are searching in urban destinations, with 31 percent telling us they’d prefer a home in a city. In contrast, 40 percent of buyers who are looking for a home they plan to spend time in are looking near popular coastlines and sunny beaches.
When is the best time of the year to make a purchase?
There can be benefits to buying before or after peak season in any given market. In most markets, buying after peak season improves your ability to negotiate a better purchase price. Plus, If you’re buying a property that can use some cosmetic or structural updates, buying after peak season can be an advantage, as you’ll have a slower period to make repairs. But you will need to start marketing the property quickly to ensure you get maximum bookings prior to peak season.
When shopping for a home that’s already in good condition, it’s a good idea to close before peak season. You’ll have the opportunity to purchase and receive advance deposits at the closing table for reservations already on the books. Since you didn’t have any expenses generating the bookings, that’s like money in your pocket. But all those ‘free’ bookings come with a cost — you’re less likely to negotiate a discount on the purchase price.
It is crucial for buyers to understand the vacation rental landscape before jumping into a purchase. Many cities, states and counties have their own regulations about using your vacation home as a rental, so it’s important to understand what restrictions may be in place.
This is why hiring a knowledgeable real estate agent that has experience with vacation rentals is always a good idea. Here at Vacasa, we have a certification program for our partner real estate agents that includes tools, market data and marketing materials that helps those new to the industry educate and position themselves as a vacation home specialist.
What factors will influence the changing market?
We found that it’s important to watch institutional investors. These professionals hold a lot of capital and are turning to real estate to make high-transaction investments. As investors look to expand into smaller markets, the vacation rental market will continue to become more popular.