Certified Experts in the 30A Niche Market
By Sallie Paris
Good realtors know their markets. 30A neighborhoods are filled withdesirable second homes and profitable investment opportunities. To meet the needs of our clients in this exceptional area, my Coastal Luxury colleague Smith Burke and I sought expertise through Resort and Second-Home Property Specialist (RSPS) Certification.
The National Association of Realtors defines RSPS as “an official NAR Certification [that] allows buyers and sellers to have confidence in the ability of a REALTOR® who specializes in buying, selling or management of properties for investment, development, retirement, or second homes in a resort, recreational and/or vacation destination….”
Through hours of coursework, webinars, research, and a one-shot-only final exam, we became educated in topics specific to vacation and investment properties—topics that are not included in general real estate courses. Smith and I need a strong working knowledge of niche property transactions. Our clients rely on us to answer technical questions, especially when they don’t know what questions to ask. Most of my clients purchase RSPS properties. The same is true for Smith, so we study all issues concerning such parcels. Doing so differentiates us from other agents because we know the intricacies involved. We are committed to helping 30A remain a lucrative region for investors.
Realtors must make sure all bases are covered to help clients decide what they want and then how to find it, finance it, and manage it—whether it’s a true second home, investment property, or something in between. It’s important that we lay out a lot of information on the front end so buyers can make the smartest decisions. That includes referrals to relevant specialists like contractors, attorneys, security companies, and accountants.
I think the most important service we provide is teaching our clients what they need to consider when choosing properties. Experience helps us view transactions from a wide perspective while giving clients property-specific guidance to save them time, money, effort, and mistakes.
Here, Smith and I list the most common questions buyers and sellers ask us and answer them so potential clients gain understanding and peace of mind as they navigate similar deals:
Q: Why should a prospective buyer/seller hire a realtor who is RSPS certified?
A: Clients can rest assured that RSPS certified agents not only work in a secondary/investment market every day, but also, with the RSPS designation, prove they have taken extra steps to protect their clients.
Q: What approaches do Coastal Luxury agents use to advise clients?
A: Our agents put less stock in what does/does not look like a deal at first glance and instead rely heavily on data. Smith explains, “Our market has gotten stronger year by year, and what might have seemed like a high price a few months ago now looks like a steal. The only way to stay informed is to constantly have your finger on the market’s pulse. We do this through weekly meetings with our entire Coastal Luxury team and consistent two-way communication with former and potential clients.”
In a business that’s one of the most data-rich industries in the economy, too many realtors, buyers, and sellers rely on gut feelings. Sometimes, gut feelings can point you in good directions, but buyers and agents alike can be falsely influenced by inflated impressions of luxury properties—impressions the market won’t bear. Micro-local knowledge and documented numbers help agents wisely advise clients as well as identify segments of the market that might be overlooked or undervalued. For example, every Friday, Smith sends a marketing email with his best investment property picks for that week.
Q: What should owners consider when deciding whether to offer their homes as vacation rentals or keep them as private second homes?
A: Realtors in vacation/rental home markets ask clients these types of questions:
- Do you need income from the property to finance and maintain it? If so, it is an investment property.
- What kind of a return can you get?
- Are you willing to give up the major summer holidays to renters? Owners buy with intentions to rake in rental income, but once they have beautiful new beach houses, they have a hard time staying away from them.
- Have you considered how your usage during peak season will take away from your income stream?
- Have you interviewed multiple rental management companies? Buyers should evaluate projections and find out which agency is the best fit for a property.
- Do you understand the 14-day rental rule? This pertains to rentals and tax deductions.
In addition to the 14-day rental rule, the topic of IRS Code 1031, known also as “like-kind exchanges,” often comes up during property searches. I addressed that topic in our winter issue, which readers can get from our office or from clicking the link below.
Q: What are the most common mistakes clients make that Coastal Luxury agents can help them avoid when buying non-primary residence properties?
A: Buyers should make sure they approach transactions with the right mindset. For example, if you plan to stay in the home only from time to time or rent it to vacationers, don’t obsess over having a huge walk-in closet. You won’t need it; neither will renters. If you desire income from the property, prioritize the needs of potential renters and sideline your personal preferences. Use less emotion and more data to choose a property where you can relax, vacation, and/or generate income.
It’s easy to overcomplicate things by trying to predict the future. There is absolutely no need for buyers to guess what renters might like or how much income a property might produce. Coastal Luxury agents track information from our vigorous market to calculate reasonable prices, project income, and customize buying and selling strategies. Realtors cannot predict the future, but they can use available data to put buyers’ minds at ease.
Q: How difficult is it to secure financing for second homes and investment properties?
A: Detailed paperwork is required, but lenders understand this market. Buyers must be responsive when lenders ask for documentation. Agents can help you prepare to meet with lenders, which saves both parties time and stress.
Q: How do borrowing scenarios differ between primary residences and RSPS properties?
A: Borrowing qualifications, taxes, insurance requirements, and transaction details are specific to property types and locations and the lending institutions buyers use.
Secondary homes and investment properties are greater lending risks than primary homes, but financing is available.
Keep in mind that not every lender can finance every type of property. Down payment requirements vary based on type, use, occupancy, and more. If financing is needed, we identify properties where financing is possible and put interested buyers in touch with willing lenders.
Q: What are some issues owners of second and rental homes encounter compared to those who reside in their properties?
A: Maintenance. If a home is being used by others, you will quickly notice or hear about repair needs. If you don’t rent out your property and go weeks or months between stays there, you may have fewer issues, but also won’t notice problems as quickly. Owners must factor maintenance and insurance costs in with total ownership expenses. We suggest hiring a well-respected management company to maintain your property. They charge a fee, but keep repairs, bookings, and headaches off the property owner (even if the property is not on a rental program). Many businesses offer storm preparation and niche insurance products.
Q: What happens if there are tax, community, or legal changes regarding vacation, investment, and luxury properties in the future?
A: Area realtors pay close attention to local policy because decision-makers are forced to take tourism into account. Coastal Luxury agents attend public meetings to stay aware of any upcoming changes that could be of interest to past/future clients. Always, always, ALWAYS talk to your own legal and tax advisors. No two buyers’ financial profiles are the same. Circumstances, properties, tax laws, codes, and so on are always subject to change.
Q: How has your RSPS Certification helped Coastal Luxury clients and the 30A community?
A: One of my mentors in this business often says, “There are no good surprises in real estate.” Smith and I strive to eliminate surprises and take elite-level care of our clients. Through specialized training and experience, RSPS Certified realtors help clients make well-informed decisions to secure ideal vacation and investment properties that maximize appreciation and returns.
Sallie Paris uses broad local market knowledge and a high level of service to assist clients in all aspects of real estate purchases—from investment properties to beach homes to assimilating into local culture. Sallie says, “Although I’ve lived here for years, I still feel like I’m on vacation every day. My goal is to help other families find perfect properties so that they can grow to love the Emerald Coast just as I do.”