As the Summer begins to unfold, many people are making travel plans. And there’s only one thing better than a vacation: having a vacation home in one of your favorite places, always waiting when you arrive in your personal paradise.
Obviously buying a vacation home is a sizable investment. Is it worth the price? Can you recoup some of your investment by renting it to other travelers when you’re not there? What location is ideal for your desires?
Our home state of Florida is blessed to feature many of the most popular cities for vacation homes in the world—thanks to its fabulous beaches, golf courses, theme parks and other tourist activities. We decided to reach out to realtors and colleagues around Florida and get their input on the vacation homes in their respective cities. You can check out their commentary regarding homes on the Atlantic Coast, Gulf Coast and inland, as well as find information to answer some of the FAQs listed above.
This week we speak to Greg Martin, owner and realtor at Sterling Realty in Sarasota.
What’s the major draw for someone buying a vacation home in Sarasota?
I guess it depends on the perspective. From a social and entertainment perspective, Sarasota really is a small town with big city amenities. Visitors and residents alike have an abundance of choice: the opera, orchestra, many live theatre venues, the Van Wezel Performing Arts Center, the Ringling Museums, jazz clubs, beaches (Siesta Rated no. 1 in the USA), amazing culinary choices (many with live music), fishing, boating, baseball, golf, and my favorite: hockey (did you know that 42 recreational teams play out of Ellenton Arena?). And, with Tampa Bay so close, watching the Lightning play is awesome! Let’s not forget that we also have one of the best hospitals in the state in Sarasota Memorial. You typically cannot find all of this in a small city like ours.
From an investment standpoint, there are a few different perspectives:
A) For European purchasers, the area provides great opportunities for them to rent out their place in the high season while they generally use their places in the fall and the spring when weather back home is still cool (half of our 100-plus properties are owned by Europeans).
B) For Northeastern states and Eastern Canadian purchasers, the area is well serviced by plane into either Tampa or Fort Meyers and our own SRQ. Not only that, it is usually less than three hours from most major hubs and in the same time zone so it makes for easy quick trips or extended stays.
And did I mention the value? Sarasota is far less expensive than the notable southern neighbors in Naples and Marco.
What would be your first piece of advice for anyone buying a vacation home in general?
As always, do your homework. Find a local Realtor who will listen to your needs and wants, and guide you to the right neighborhoods. They will provide you with price ranges and what you can expect to get for the price in the different areas. If you’re going to consider renting the property out, choose a Realtor that provides rental and property management services because they won’t just sell you something and run off to the next sale…they have to face you after closing!
Any specialized advice for those looking for a vacation home in Sarasota?
The best advice is to gain an understanding of the advantages/disadvantages of each of the areas. For example, if you only want a place to come to for short periods (weeks at a time) or to get away from the big cities and just plunk down and not have to drive anywhere—many of the gated golf communities are ideal or even the quieter parts of the Keys (Casey, Siesta, Longboat). But if you are interested in checking out lots of the area’s restaurants, beaches, shopping or entertainment venues…the traffic—especially in peak season—is heavy!
Some out of town customers come to us with the idea of being directly on the beach and want to see the sunsets every night and want to spend less than $500,000. What they may not realize is that: A) You typically cannot get a full gulf view for that kind of money and B) the view out to the ocean during the winter months is pretty dark (Read: You can’t see anything after 6:00). The locals and the experienced, far prefer a bay view—back to the city or out to the keys. At night it looks spectacular and for 30-40 percent less investment!
How realistic is the possibility of renting out one’s property when they’re not at home? How much work should be expected to make this a possibility?
First off, there are distinct differences between beach (or close to beach) properties and the inland communities. The beach areas draw even locals for short stays and the rental demand is very strong almost all months (September being the exception). For the inland communities, the prime months are January through March. Companies like ours are doing direct marketing to European and Northeastern/Canadian markets in an effort to bring additional demand for the shoulder seasons. The locals know that October through December and April through June are spectacular months here!
To answer your second question…it depends. There are some owners who enjoy dealing directly with prospective guests and advertising on do-it-yourself platforms (VRBO and many others), dealing with the many phone inquiries, making arrangements for access and dealing with emergency issues which may arise. There is no question that if the owner lives out of town or is busy with either work or many social events, issues only arise at the most inconvenient times! It is a lot of work to cultivate an environment where people come back again and again.
Of course our perspective is slanted towards using a professional company to manage property (both rentals and routine maintenance). In this environment, professional agencies handle both the administration and general management—offering payment of all bills related to the property, and providing an online portal for owners to see all of their financial statements and invoices. Revenue is deposited via ACH distribution on a monthly basis. Some more advanced companies offer marketing distribution on multiple rental sites to drive more rentals for the owner. Fees for these services are tied to performance in most cases running between 15 and 20 percent of income.
For high-end properties, there are a few companies like ours that offer a unique private network of owners just looking to travel to other locations for brief periods. In most cases they are not interested in renting their property out but would share with like minded HNW (high net worth) individuals. In this case we simply charge a facilitating fee or if they want concierge level services, an hourly rate is charged.
What’s a ballpark range for the median vacation home price in Palm Beach?
On the Keys, you can get a 2 bed/2 bath condo with great amenities in the $400-500,000 range. And inland, in a respectable golf community, the similar properties go for between $200 and $300,000.
Single family homes on the keys typically start at $600,000 and go up quickly from there (to the extreme, on Longboat Key at $19,900,000) and inland, nice properties start as low as $350,000.