Could buying a second home be the secret to planning for a happy retirement, funding college tuition, saving money for an amazing family vacation, or all the above? Thousands of vacation rental owners around the world would agree.
HomeAway, a leading online vacation rental marketplace, has performed and analyzed one decade worth of vacation rental owner research in honor of their 10th anniversary this month. Their insights track new, up-and-coming industry trends for 2015 and beyond.
As one of Tripping.com's top industry partners, we are happy to shed light on HomeAway's meaningful data to uncover five vacation rental owner trends that are revolutionizing the industry.
1. People aren't waiting until their golden years to buy vacation homes
You can call it a midlife crisis, but people aren't waiting around until retirement to jump right into owning their dream destination home. According to the National Association of Realtors, the median age of vacation home buyers decreased from 55 years old in 2004 to 43 years old in 2015. Buyers are taking the plunge into the vacation rental business at an earlier age, and this allows for more years to enjoy the benefits of owning a second home.
2. More people are opening their doors to travelers
According to HomeAway, only 7 percent of vacation home buyers in 2004 said the primary reason for their investment was to rent to travelers whereas most people were purchasing second homes exclusively for personal use. Today 23 percent of buyers say the number one reason they purchased their second home was to start a vacation rental business.
According to HomeAway, a whopping 89 percent of newly purchased vacation homes will be rented out within the first year. This statistic shows that the growing popularity of vacation rentals is making a big impact on buyers' investment intentions.
3. Vacationing and running a business are no longer mutually exclusive
HomeAway reports that it consistently sees its members cover more than 75 percent of their mortgage by renting out their vacation home for as little as 18 weeks per year. This gives them 34 weeks to enjoy it the way they originally planned: with friends and family. With this incredible flexibility and annual return on investment, homeowners are able to run a manageable business with plenty of time to enjoy the hard work they put into their vacation home.
Owners everywhere are taking note of these successes, and 73 percent of hosts today are listing their home with the intention of covering all of their expenses. This is up 27 percent since 2008 when only 46 percent of homeowners expected to cover their expenses by renting.
A growing number of ambitious homeowners are confidently setting the goal to make a profit on their investment as opposed to just covering the expenses through renting. Today 11 percent of owners are listing their homes to make a profit as opposed to only 3 percent in 2008.
4. People are investing in homes far, far away (and still living happily ever after)
We live in a world where entrepreneurs can successfully run a business in downtown Chicago from a cottage 6,500 miles away in Patagonia (so long as there's wifi). Why should running a vacation rental be any different?
In 2004, the average vacation home buyer would invest in a property within 49 miles of their primary residence. According to HomeAway, the average vacation home investor in 2015 will now purchase a home at least 322 miles away from their primary residence.
Distance from home no longer inhibits buyers. In fact, the further the vacation rental is from an investor's home base may be more of a motivation to buy than a deterrent. It's finally possible to properly manage a property remotely thanks to online tools and technology, so buyers everywhere are searching for a second home where they can truly escape on vacation.
5. Owners are turning to property managers to help run their business
Hiring property managers is on the rise as more people begin to invest in vacation homes further away from home. Property management companies help provide personal services to enhance the guest experience that owners are not able to offer remotely such as 24/7 customer support lines and timely local tourism information. In 2008 only 29 percent of vacation rental owners were utilizing property managers, but in 2015 the number of owners hiring property managers increased to 41 percent.
Managing rentals remotely has become easier over the past decade thanks to technological advancements, but time is still a commodity to most vacation rental owners. HomeAway found that although most profitable owners consider their vacation home a business, 75 percent of their members still work full-time in other fields. Property managers are increasingly becoming a go-to resource for owners who don't have a lot of extra time to care for their home and guests.