In the 2024 Vacation and Investment Home Survey Report, RCLCO shares data from a comprehensive national survey, conducted in late 2023, that illuminates the motivations, product type preferences, and locational considerations that are driving today’s buyers and owners of vacation and investment homes.
The rise of remote work arrangements, recently accelerated by the COVID-19 pandemic, has also driven more real estate purchases in vacation home destinations, allowing affluent households more flexibility in choosing where to live. This flexibility has fueled interest in vacation homes located in desirable vacation destinations, as individuals can spend extended periods of time there while still maintaining their professional commitments.
In the near term, today’s higher mortgage rates have the potential to exert some downward pressure on the demand for vacation/investment homes, but RCLCO research shows that other factors such as overall economic growth, a strong stock market, healthy primary home appreciation, strong employment trends, and household lifestyle preferences play the most important roles in shaping demand for these types of properties. For buyers who view vacation homes more as investment properties, higher mortgage interest rates can affect the profitability of the investment since higher borrowing costs may reduce potential rental income yields and overall return on investment, leading some investors to reconsider. However affluent buyers who can afford to purchase properties outright with cash, for example, leveraging the equity in a primary home or stock market portfolio, and those purchasing primarily for their own enjoyment, may be less affected. The key then is understanding what vacation/investment home owners and potential buyers prioritize and what motivates them, which are the subjects of this survey.
This research report by RCLCO provides an in-depth look at what households are seeking in their ideal vacation or investment home – and the motivating factors and preferences for the ultra-luxury market segment; for households seeking specific locations including beach, lake, mountain, or city; and for those who are seeking branded residential product. The report delves into specific amenity preferences, and preference for those who use a home as an investment property compared with a seasonal or vacation home.
This report offers an overview of the consumer preferences of buyers and owners of vacation and investment homes.
1. Beach homes are the most sought after vacation or investment property, with 60% of survey respondents indicating this would be their top choice location. Other locations that scored highly included lake, mountain, and city residences.
2. The investment potential of vacation homes is an important factor, with 63% of respondents expecting the property to appreciate meaningfully and/or to generate a meaningful rental income stream. Nearly 65% of respondents intend to rent their property out at least some of the time, with a professional management service the most popular approach (27%) followed by an online platform such as AirB&B, VRBO, or HomeAway (24%).
3. Sustainability is important to all respondents, but even more important to the ultra-luxury set of respondents earning $500,000 or more a year. While 39% of all respondents found sustainability “very important,” over 61% of the ultra-luxury respondents indicated the same. Notably, the ultra-luxury respondents care less about financial incentives of sustainability, with 43% willing to pay more for environmental benefits alone; while respondents earning less than $500,000 annually care more about financial payoffs such as lower utility bills or tax breaks.
4. For those looking to buy a home, a majority (61%) would prefer a move-in ready home which they would be able to enjoy immediately. A smaller share (26%) are interested in a semi-custom home where they may pick from a set of plans with customization and finish options, while the remainder (13%) would prefer to design a custom home working with an architect, which results in more customization but takes longer.
5. Amenities are important to vacation and investment home respondents, and the top amenities sought after by all respondents include nearby restaurants, swimming, trails, and shopping. Interestingly, amenities such as golf, tennis, and pickleball have increased in popularity since our initial survey in early 2020 prior to the pandemic.
We take a strategic, data-driven approach to solving your real estate problems.
Contact Us