Vacation Purchase Strategies in a Boom
There are not many fancy strategies for purchasing a vacation home, particularly in a real estate boom. You simply identify a hot vacation market that meets your vacation criteria-and then buy and hold. Except in warm climates like Florida, try to buy in the winter, when the demand for vacation homes is at a low (a ski resort would be another exception). After five or ten or fifteen years, you should see a substantial increase in value. The difficult task is identifying what the hot vacation markets will be. Sometimes you can get lucky and simply stumble upon an emerging hot market, but most of the time you need to do your homework.
But a boom environment makes it easier to be successful in buying vacation homes. Again, in recent years, the boom in the vacation-home market has outpaced the primary-home market. And it is likely to last longer. How can you take advantage of the vacation-home boom? Stay ahead of the crowds and follow the boomers.
Stay Ahead of the Crowds
If you play follow the leader, you will find it hard to make significant money in the vacation-home market. There are approximately 76 million baby boomers in America in their peak earning years, headed toward retirement. They are beginning to buy vacation homes in increasing numbers. In the next five to fifteen years, they will be retiring into vacation homes. Millions every year will be looking to purchase a vacation home as a second home. Why? Because they have the money. Millions of other boomers will be preparing to purchase a vacation property as a retirement home during the next decade and a half. Either way, as I've pointed out before, the boomers will drive demand in the vacation-home marketplace during the next five to fifteen years.
This is not the time to follow the leader. If you follow, you will pay a very high premium for a vacation home five to ten years down the road. Now is the time to stay ahead of the boomer crowd. My best advice regarding the vacation-home market is to buy now.