Community News

As fall begins to quickly feel like winter, many of us around here start longing for a getaway to someplace warmer. On the other hand, many people from other places begin to dream of the snow-covered mountains of Montana. Therein lies the allure of the vacation home concept, investing in real estate at a destination spot where you intend to return year after year or ideally many times throughout the year. There is something comforting in making your vacation feel more “personalized” than what a standard hotel can offer by the continuity of returning to the same place, your place. That is what makes the vacation and second home market such a popular option and emerging trend.

Many owners of vacation or second homes have no desire or intention to rent to others.  Yet, at the other extreme, numerous properties are used solely as an investment to be placed on the vacation rental market. However, many “private use” second homes transition to vacation rentals as the opportunity presents itself. One online vacation company stated that many times vacation home buyers “do not initially intend to rent their second home, they choose to do so after a year or so of ownership, discovering they do not use the home as often as intended, and it is more expensive than anticipated.” Investors may very well find it beneficial to use the supplemental income to defray some of the costs. By utilizing the services of a top-notch property management company, the home can be kept in good condition while being rented out to fit around the homeowner’s own usage schedule. 
 
When seeking out a property to use as a vacation rental, there are a few items that make a home stand out from the pack. As with all real estate, location is paramount. Whether on water, near the ski hill, or in a remote hideaway, having a unique and popular locale is one way to keep the rental at full capacity. Easy access is another desirable quality. Additionally, offering exceptional views in the way of stunning sunsets, snowcapped mountains, or simply the absence of other people is often a deal-maker for properties with perfect site orientation and view-encompassing windows and decks. 
 
The vacation rental segment appears to be a bright spot within the real estate market by providing some additional income to second homeowners, as well as offering a more personal and spacious lodging option for vacationers. The industry made significant revenue gains in 2007, and with the costs of hotel accommodations remaining on the rise, this seems to be a win-win alternative to more traditional hospitality arrangements.
 
For the ultra-luxury segment of the vacation homeowners’ market, distance from the primary home does not matter. Private jets or boats supply transportation back and forth, and travel time constraints may not be an issue. But for most second homeowners, their vacation getaway is found in their own backyard. According to NAR’s (National Association of REALTORS) Profile of Second Homeowners, the median distance from one’s primary home to their second home is 220 miles. For nearly half, about 49%, these second homes/vacation homes are located in the same state as the primary residence. Furthermore, 82% of all second homeowners drive to their second home versus other modes of transportation.
 
The most popular options in our region seem to fall into two categories, the “Weekend Retreat” or “Escape the Cold”. The first concept is a “driving distance or quick flight option” by using the property multiple times during the season, usually with short 3-4 day stays or weekly stays, and it is usually defined by convenience and privacy or summer/winter sports. Some prefer a remote hunting, fishing, or hiking cabin in the mountains for year-round usage. Other choices are seasonal in nature. Summer finds many “Bozemanites” traveling to Hebgen, Canyon Ferry, Flathead, Seeley-Swan, or Whitefish Lake for boating and water recreation. And for the snow lovers, many locals seek the “slopes at your doorstep” options in Bridger Canyon or ski-in/ski-out at Big Sky.  The second category, formerly known as the “snowbird concept”, allows a segment of our community to “winter” in warmer climates. Arizona, California, Nevada, Hawaii, and Baja seem to be among the top destinations. The usage of this type of second home is much different, with the owner occupying three to six consecutive winter months in their second home. Some owners commute monthly, spending the majority of each month in warmer temperatures.
 
As one looks for opportunity in these real estate times, there are outstanding values available as close as Big Sky and as far away as Hawaii. With the market corrections of the past year, now may be the perfect time to consider purchasing a vacation or second home that suits your “weekend wanderlust” or fulfills the “warm winter extended stay”.