 | Daily Real Estate News | May 15, 2008 |
Become a Second-Home Specialist
WASHINGTON — Home sales in many areas remain sluggish but you might find opportunity in the second-home market, real estate economist John Tucillo told REALTORSŪ at the NAR Midyear Legislative Meetings this week.
The former NAR chief economist and author of How a Second Home Can Be Your Best Investment said favorable demographics are helping the second home marketplace, but you need to understand the niche. Here are some key groups of buyers:
- Baby boomers who are are auditioning their last home. “They’re unwilling to make a predetermined choice. They’re all about finding places that suit them.”
- Younger people who are looking for a weekend getaway. Those who work in the financial industry, in particular, are prospering.
- Non-Americans who are seeking a second home in the U.S.
These groups, Tucillo said, are poised to keep this market strong, regardless of the state of the economy and the overall housing market, “Over the next two to three decades there should be an increasing demand for second homes,” he said.
How can practitioners tap into this demand?
- For boomers, focus on selling in exciting locations. Their retirement interests are much different than that of their parents, who didn’t mind moving into communities in the middle of nowhere. “Boomers want excitement and stimulation,” said Tucillo, noting that college towns are a particularly hot destination for this group. Start a travel real estate blog. Get yourself known in your area,” he said. “If you don’t like writing, bring in guest bloggers.”
- Grow your knowledge so you can help international buyers. Practitioners stand to gain from cultivating non-American clients seeking a second home in the U.S. “But you need to become tax and financing experts. There are considerable tax barriers for foreign investors,” he said. Visa restrictions for non-U.S. residents also pose challenges for all parties.
- Know your clients' motives. Understanding what your clients really want from a second-home purchase is also a key to success. “Is it for profit, cash flow generation, vacation, a potential retirement home, or all of these? “ Tucillo asked. Boomers, in particular, are restless, and may be looking for something better all the time. “It’s important to consider what the expected holding period is for your buyers. If they don’t plan to stay for a long time they could be making a bad investment,” he said.
- Learn the latest in financing. Because lending requirements, and especially second-home financing, have become more stringent, it is essential to “bone up” on relevant changes on the laws and rules, Tucillo added.
— By Wendy Cole for REALTORŪ magazine online
Related Links
REALTOR.org Resources: Second-Home Specialist
REALTORŪ Magazine: Ready for Seconds?
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