West Virginia’s Vacation Home Market Has Gone Unnoticed Until Now
Vacation homes are synonymous with Florida, California, and the Northeast, but for those looking for a fun escape that’s budget-friendly, West Virginia might be your ticket to relaxation. Known as the Mountain State, which is appropriate given the rough ridges of the Appalachian Range, West Virginia is also home to some beautiful lakes. Sit back and relax as we explore West Virginia’s vacation home market.
Why West Virginia?
West Virginia is known for the Appalachian Mountains, hiking trails, and its fruitful mining history, but look deeper, and you’ll find so much more. Tourists enjoy the rich history tied to the backwood trails that pioneers like Davy Crockett and Daniel Boone once walked, but true West Virginians enjoy the beautiful lakes.
Outside of its natural beauty, West Virginia continues to be one of the most affordable states in which to live and the cheapest state in which to buy a home. West Virginia’s median home value is $115,018, well below the national median of $276,717, giving more Americans an outlet to escape and catch up on some R&R. In competitive vacation home markets like Florida or New York, vacation home prices can easily be in the multi-millions, often with less private space. With all of the natural beauty and fascinating state history, it’s a wonder that West Virginia’s vacation home market has managed to fly under the radar thus far.
West Virginia’s Vacation Home Market
In popular lake towns like Summersville (near Summersville Lake) and Morgantown (near Cheat Lake), homes are being snatched up faster than agents can put out “For Sale” signs. This flurry of activities has sent home prices soaring, averaging higher than the state’s median home value at $226,176.
Carol Goff is the owner of Carol Goff and Associates which has listings in West Virginia — and Carol’s business is booming. "We have been especially busy selling vacation homes, lake homes, people buying second homes,” Goff said. In the Cheat Lake market alone, there have been over 1,000 properties sold in the past year.
How to Cash in on the Vacation Home Market
Whether you’re interested in branching out into a new niche market buying a vacation home for yourself, there are important decisions you should make before moving forward. Vacations require planning and logistics, and so will buying or selling a vacation home. Finding a property that will match you or your client’s lifestyles is crucial to the success of the transaction. But the most important decision to make is how the property will be used. From a financing and tax standpoint, it’s important to understand how the property will function. There are three options:
- Primary residence. The property is bought for as little as 3% down and significant homeowner tax benefits are earned.
- Vacation home. The property is used as a vacation home. It can be used anytime, but bank lenders won’t allow the home to be rented out. The home can be purchased for as little as 20% down. Mortgage rates and tax benefits are the same as the primary residence.
- Investment property. The property can be rented out and available for use when it’s not rented. Lending rates are 0.25% - 0.37% higher than vacation home rates, and a down payment starts at around 30%. The tax benefits are less advantageous, but the extra income will help with affordability and maintenance.
Selling a second home that may double as an investment requires a different skill set than selling a typical family home - primarily an in-depth knowledge of the tax implications that second homes carry, as mentioned above. Additionally, clients looking to purchase a vacation home are more focused on the resale value, rental income, and taxes owed than they are on school zones and luxury kitchens. If you're going to specialize in this niche, consider pursuing NAR’s Resort and Second-Home Property Specialist Certification.
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