Thinking of Profitable Real Estate Investment? Vacation Homes are a Good Pick

To many people, real estate investing may seem like a gamble, even after the economic conditions have improved over the past two years. However, the keen interest of investors and the steady profits on sales have made the market favorable for the purchase of vacation homes in the upcoming years.

What's hot in real estate investing

A limited inventory, steady prices, high demand and a strong situation of the stock market have all been the triggering factors in increasing the sale of vacation homes in 2012- 2013.

According to the data collected by the National Association of Realtors, prices of vacation homes surged by 10.1% last year, and many investors reaped the benefits of profitable rentals in the market.

The buzzing tourism industry goes to record highs in the summer months, as visitors from around the globe flock to hot spot coastal regions in Virginia, Florida and Delaware. Vacation houses are also on fire in markets like Chicago, Colorado and Carolina, thereby increasing the room and options for investors.

The increasing number of foreclosures and thriving numbers of discounted vacation property has propelled not only investors but also second-home buyers towards this area of the market. What’s more, the number of cash transactions for the purchase of these homes has also increased considerably. It is speculated that around 46% of the homebuyers and investors got hold of vacation property in an all-cash transaction in 2012.

So what’s the future for vacation homes in the future?

vacation homes real estate investingRentals are always a great choice for investors in the current market scenario; however, the location and overall appeal of the property in question is a critical factor to consider in this regard. Renovations and upgrades greatly help in increasing the valuation of vacation property and make them more of a luxury commodity in the eyes of buyers. Flipping of vacation property is also a favorable option, as the inventory is currently on a tighter front and more and more buyers are looking for decent options.

However, timing is of essence in this regard, and investors should take in all the factors of the locality and demand before thinking of flipping. Property flipping does sound to be profitable in the current market scenario, but spending excessively on vacation property for renovation and upgrades may turn out risky for the investor.

Investors also need to understand that sale of vacation homes requires a slightly different approach than the sale of residential and commercial property. The finer traits and attractions of the property need to be highlighted, and strong marketing is the key. Using photographs of the locality and highlighting the nearby locations effectively calls for a greater demand and attracts more and more potential buyers towards the property.

At the end of the day, choosing a desirable location and paying a little attention to refurbishment and renovations can definitely spruce up the value of a vacation home and certify it as a viable and profitable real estate investment. With the current market situation, it is a smart move to find a decent deal for investing in a vacation home.

by, Paul Cook: EquityBuild News Contributor

Source:
Statistics by the National Association of Realtors