Wednesday, August 06, 2008

Vacation Homes Near Disney-It's Time to Buy

Buyers Broker of Florida has helped many home buyers find vacation homes, and hear are responses to a recently inquiry about the second home market.

1. What are some undervalued resort markets that might be a great place to buy a second home?

Florida (Disney area) is the hottest, with the absolute best buys. While everyone talks about the high number of foreclosures and short sales in Florida, the lions share is in the vacation sector. Inventory was over built in 2005-2006 with promises of unrealistic rental returns, and now the out of country investors are walking away from greatl properties while other out of country investors are picking up these properties for 50% off…most paying cash. Just had a client close on a $260K that someone paid $473K in 2006. Today had a bank accept a short sale for $220K in a community that new construction is still selling for $400K+.

2. What are some financial parameters to consider when buying a second home, i.e. when is it fiscally responsible?

Depends on the clients goals. If they are cash buyers than the unreliable income derived is usually enough to satisfy the investor. If they are financing, the reality is that they will be lucky to break even and there will be many times that they will be digging in their pocket to pay the overhead. As from mortgage payment expenses to consider, property manager, electric, water, pool and yard maintenance, and booking splits. If they want to use it as a personal second home for mini vacations throughout the year, then income is not as important.

3. Is it personal preference or does it make more sense to consider buying a condo rather than a single-family home as a second property?

Both. Some clients want less hassle so will go for a condo or condo-hotel that is loaded with amenities, concierge services and a real turnkey operation….or maybe they just cannot afford a desirable vacation single family home. Older or and poorly located vacations single family homes are difficult to rent or even find a vacation property management for. Ideally the most desirable vacation rentals are 6 or 7 bedroom homes close to Disney. If a buyer does not have the budget for it, they are better off in a smaller investment…buy better quality rather than bigger size.

4. Any other tips on buying a second home in this market would be great.

Be realistic, don’t expect a deeply discounted vacation home to come with all the appliances and top of the line furnishings…(someone has already stripped it). Go for the classiest community, in the closest location to the attractions. Don’t get emotionally vested in one property…make a bunch of offers and see what shakes out. Buy as new as possible, as those are the money makers. Consider setting up your own website, to generate additional bookings for maximum return on investment.