Second home purchases booming

USA Today (Society for the Advancement of Education), May, 2005

It's official. Second homes are selling like the proverbial hotcakes. According to a report by the National Association of Realtors, 23% of all homes purchased in 2004 were bought as investments. Another 13% were vacation homes. There was a record of 2,820,000 second home sales, up from 2,420,000 in 2003. Investment property and vacation homes account for more than one-third of residential transactions.

"Real estate has always been a solid, safe, tangible investment," declares Christine Hrib Karpinski, author of How to Rent Vacation Properties by Owner: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment. "First, it usually appreciates in value. Also, there is a sense of control that doesn't exist with, say, the stock market. When you own real estate, you can feel confident that someone else's unethical decision won't cause you to lose everything. And, of course, the rental factor means that you can actually earn income from your investment."

However, "buying a home for investment purposes is very different from buying a primary residence," asserts David C. Hehman, co-chairman and CEO of EscapeHomes.com, an online marketplace for buyers and sellers of second homes and resort properties. "It's a different process and you need different information. So, the first thing I would suggest is research, research, research. Know why you want to buy and what you want from the experience. Be realistic about both costs and expectations. And find a great realtor to walk you through the process.

"I fully agree with the Warren Buffet quote, 'An investor's success is in direct proportion to the degree to which he or she understands the investment.' So, get educated.... Get a good sense of the second home marketplace. The more you read, the more experts you talk to, the more you explore the marketplace, the more likely you are to make a smart decision."