Resort Home Buying Tips

1. Buy location, location, location (right community & location within.)
2. Buy property within an easy day commute.
3. Visit your proposed destination both in and out of season.
4. Buy the first season after the peak season.
5. Find locations that offer long seasons for golfing, boating, skiing
6. Research the traffic during in-season time (roads, water, ski lifts.)
7. Buy a home with a minimum 2 bedrooms and 2 bathrooms.
8. Research conditions for water, septic systems, propane gas.
9. Look for homes that offer good resale characteristics.
10. Research utility rates.
11. Research availability of medical and fire protection services.
12. Ensure that the community will provide the recreational opportunities
    that family desires.
13. Review sold comparables over a 5 year period.
14. If you plan to rent the property verify that resort association allows renting.
15. Document data provided by rental management firm.
16. Don’t plan on rental income covering all expenses.
    

Related Research

Data provided by National Association of Realtor Studies.

The medium price vacation home in 2003 was $190,000
In 2004 the medium price vacation home showed a 12.8 increase over 2001.
In 2003 the typical vacation home buyer had an annual income of $71,000.
In 2005 27.7 % of all homes purchased were for investment and 12.2% were
vacation homes.
In 2007 the second home market had grown to 33% of all home sales.
The 2007 medium vacation home price of $195,000 was down 2.5% from 2006.
Sales to investors declined 18.1% in 2007.
In 2007 eight of ten felt their vacation property was a good investment.

Long term demand for second homes looks favorable because there are a large number of people in their prime years for buying property.
A NAR study of baby boomers revealed that diversifying portfolio investments was a significant motivation for purchasing a second home.
Thirty (30 %) of vacation home buyers plan to make the vacation home their primary retirement residence.

 

Fractional Ownership

Fractional ownership is nothing more than the renaming of time shares. The name change was triggered by the bad image time shares had received from owners who were having problems selling their time shares. If you prefer to avoid home maintenance and custodial tasks fractional ownership may be your best alternative to having a property available for your vacation needs. However, it is not wise to consider it an investment property, as the return on the investment could be very little or a loss. Like time shares these properties may be difficult to sale.

If you decide to purchase a fractional ownership you should seek counsel from an attorney or an exclusive buyer agent familiar with fractional ownership. Purchasing a 1/6th share would give you about 8 weeks a year to use the property. It is important to learn how these weeks are scheduled for your use. You most likely will have certain holidays available on a rotating basis, every 4-5 years. All governing documents should be reviewed before signing any contracts.

Maintenance fees, concierge service fees and reserve payments will run several thousand dollars annually. On older facilities it will be important to determine if future maintenance and repairs can be covered by reserve funds.

Financing is frequently covered by the owners securing an equity loan on their primary residence. Some traditional lenders are offering financing secured on the deeded interest.


Condo Hotels

These units have become a hot new type of property. They provide an unbeatable combination---a hassle free, first class vacation spot and a long term appreciating asset. Plus they can be rented to cover some of the cost when you’re not in residence. You will actually own your unit and have an ownership responsibility in the upkeep of the common property...

You will be buying into a hotel business, so look for a unit in a building owned by a top flight international known hospitality company. Financing may require a 30% down payment.

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