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June 2003
Index of all
messages from the Association President
Working with the second home buyer.
by Don DiFiore
Second home buyers – those buying a second house as in investment of some type - are vastly different from those purchasing a house for the very first time. Their reasons for making the purchase may vary, and each variation shifts the REALTOR®'s role in helping to find the perfect second home.
It's important to look at the motivations of second home buyers. Stocks and bonds are down and shaky at best. So investors may turn to solid real estate investments. Knowing their motivation up front is the key. Are they looking for monthly income, long term wealth, a getaway for the family, or short term income? Each of these buyers needs different care when providing information on where to invest their money.
Monthly income: It pays to ask one of the most basic questions in investing in a second home of investing: Will the property, when properly managed, make money from the current rents? The REALTOR® should be able to provide research on current trends and market rents and the availability of investor loans to meet their
clients' requirements.
Long term wealth: How long is the investor willing to keep their money tied up in the property? What will be the best use of the money? The REALTOR® should find out how much and for how long his or her second home clients want their money used. With this information,
it's possible to advise the clients what is best for them for appreciation long term.
Family getaway: Most of this type of second home investor will buy farther from home and will not care so much about cost, but more about the amenities or activities close to the home they are buying. Nearly 80 percent will not even rent the home out, and will consider moving into the home when they retire.
Short term income (better known as the fix and flip): A second home buyer of this variety will want to figure out how cheaply he or she can buy it and what the cost to fix it, hold it, and resell it will be. The REALTOR® role is to provide basic market analysis, marketing time, and rate of return on investment of hard cash.
All of the above should be used to help your bottom line in real estate. Remember - get knowledge and get creative to provide top service to your second home buying
investors.
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