Resort and second home properties can be located anywhere! They are becoming more and more popular in small towns, as well as the coastal cities and mountains. In this episode, Holly Mabery joins Monica to talk about her own experience working with investment and second home clients in Sedona, AZ. She shares ideas for marketing, building connections with buyers, and highlighting what’s so special about your community.
More and more, real estate is becoming a great leverage tool. Home ownership has expanded to where people have a second home for personal enjoyment, and also more people are choosing to invest in real estate rather than another avenue. A hybrid they are seeing more and more is when people buy a house and can use it for personal use 14 days a year and rent it out the rest of the time, and it still counts as an investment property. This trend is increasingly becoming more popular as a gateway to making memories with family and friends.
The resort and second-home market has shifted from the mountains or the beach to more small town, slow-paced areas. As an agent, there’s an opportunity to accent your local lifestyle that can make a huge difference in marketing. People will always need a place to live, but as agents, we can show people how to live in your market. Showcasing what you love can help build connections with clients.
There are a few different options when it comes to financing for investment and second home properties. Working with a local lender is key. For second homes you’re typically looking at 20% down, and investment properties are usually 25% down plus an interest rate.
Some challenges that come with investment or second homes that are being rented out is that the owner has to be available 24 hours a day. In many instances, you have to live within a certain distance of the property. Some unexpected costs to note could be a property manager, furniture in the unit, replacing appliances, etc.
The resort and second home certification goes through making good choices in investment properties. It allows you as the REALTOR® to become a trusted advisor to investors. You’ll get an understanding of the financing, as well, so you can help your clients make the best choice for them.
Another important thing to be involved in is government in your area. Either get involved yourself or get connected with a group that shares frequent updates about what is going on in the area, so you know how to be proactive with what’s going on. If you already involved, maybe you can be that resource for your market/community.
Home ownership is the biggest investment someone is going to make in their life. It’s a financial, emotional, and family investment. As REALTORS®, if we help them navigate and negotiate, it makes a huge difference. Focus on what you love about living there, and what investors can expect if they live there. Highlight local businesses and bring them to the forefront.
Other resources to check out are city parks and recreation and county health services. Both usually have different programs depending on what’s going on. As you get to know potential clients, you can address their interests, hobbies, and concerns so you can start to assist them in feeling at ease.
Holly and Monica talk about furniture in the property. When it comes to furniture in the property, best practice is to do it on a separate bill of sale. The seller needs to get very specific about what they are leaving behind. Sellers need to make sure they remove any personal and valuable items before the property goes on the market. Once the seller creates the list, it needs to be made available to potential buyers. Make sure your separate bill of sale is contingent on a close.
Holly talks about some things to keep in mind when working with investment and second-home buyers. It’s important to over-communicate, especially since they may not be local. Using programs like Zoom or Google Hangout can be helpful. It also allows you to set up expectations ahead of time.
Some things you want to be able to note are what potential buyers can expect to be able to do year-round in your community and what amenities they will be provided (internet service, etc). Holly has also recently started tracking direct flights and doing some reverse marketing to find your feeder markets. One of the things that Holly does is create a lifestyle map around the areas where she has potential buyers.
As we start this new decade, embrace what you love about where you live and tell that story every day. Instagram is a powerful medium for advertising what’s great about where you live.
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National Association of Realtors, October 2020
Center for REALTOR® Development podcast: Resort and Second Home Properties