It is very possible that New Jersey’s Gold Coast will become the next place real estate buyers will look when purchasing a vacation home.
According to a new study, individuals are now buying vacation homes with a profit perspective. It’s not just getting away but having a way to make more by their own investment into real estate. Vacation homes are the classic example of a way to “kill two birds with one stone.” Buyers now look to get a nice getaway place for their vacations while also benefiting from assorted ways of renting out their home when they’re not there through such digital portals as Airbnb and other websites.
The economy continues to remain strong for sellers and buyers. August retail home sales increased only 0.1% as the buyers no longer jumped at every house on the market. This economy is getting stronger with each quarter, with consumer sentiment rising strongly to near record levels in early September. In addition to that, August industrial production rose for the third straight month, up 4.9% year-over-year. Also, inventories were up in July by .6% from June and up 4.3% as compared to 2017.
All this leads to individuals looking to do something constructive with their additional cash surplus.
As the global tourism industry continues to grow, international tourists are increasing year-over-year by 7% to a record 1.3 billion in 2017.
This provides a great opportunity and often expansion of the vacation home niche.
More than ever, it appears that buyers are viewing their vacation home buying with a consideration for the possibility of renting out their properties and thus creating a very viable stream of additional income.
Based upon a new study published by Savills and HomeAway, vacation homeowners back in 1970 basically used their properties for themselves.
Now vacation home owners who rent out their properties to travelors has escalated and skyrocketed to over 2/3 of those individuals with a second home saying they rent out their vacation property for some portion of the year to cover ownership costs.
For these entrepreneurial vacation homeowners, 1/3 of the revenue generated by the homes covers ownership costs, and another third of those who own vacation properties actually turn a profit. According to the report, the average gross yield was 6.4%, or 3.9% after costs excluding taxes.
New Jersey represents a large vacation home market. The New Jersey housing market median home value is now $318,800, according to Zillow. Home values in the Garden State have gone up 8.0% over the past year with Zillow predicting they will rise 7.5% within the next year. The median list price per square foot in New Jersey is $188. The median price of homes currently listed in New Jersey is $334,000 while the median price of homes that sold is $273,900. The median rent price in New Jersey is $2,000.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.