Why secondary homeownership is a growing trend

Of all ultra-high-net-worth individuals’ (UHNWI) assets, few hold — and accrue — more value than real estate. That’s why owning multiple properties is relatively common with this demographic, and agents who count the ultra-wealthy among their clients should be well-versed in helping them identify and acquire secondary homes that fulfill their needs and goals.

Here’s a more detailed look at the forces driving this trend, as well as the features, amenities, and qualities many luxury buyers expect as they pursue new real estate opportunities.

What are UHNWI buyers looking for in secondary homes?

Among the many reasons UHNWI purchase secondary properties, there are three that stand out:

• Travel — having a permanent place to settle in a favorite destination offers simplicity, convenience, and peace of mind, while signifying sophistication and opulence.
• Lifestyle — with the world at their fingertips, UHNWI can follow personal, professional, and recreational pursuits available only in specific locales.
• Privacy — UHNWI are often high-profile individuals and secondary homes provide a haven where they and their families can find calm and quiet.

These clients target prime locations in both domestic and international markets, including luxury resort towns, upscale urban areas, and expansive country estates. Overseas properties in popular vacation destinations are regularly sought after — though the robustness of the region’s real estate market, local tax regulations, and cultural appeal can have a significant influence on a buyer’s interest.

From beachfront villas to ski-in and ski-out chalets, or from downtown penthouses to historic mansions, the precise types of properties vary with the buyers’ preferences and objectives. However, amenities such as pools, gyms, and spas, features such as chef’s kitchens and wine cellars, and proximity to lifestyle and recreational activities are characteristics the majority of clients are looking for in their secondary homes.

Remember, some secondary homes serve a secondary purpose

Of course, a fair number of UHNWI purchase secondary homes as an investment. For these buyers, the potential for the property to appreciate in value may be far more important than what it provides as a vacation spot. If they’re meant to be an asset in an investment portfolio, or an additional stream of income as a rental or hybrid property, then you’ll need to adjust how you assess prospective acquisitions.

Here are five additional pieces of advice I would offer to agents who are supporting UHNWI in finding and purchasing secondary homes.

1. No one should know your local market better than you

Nothing is more critical than the in-depth, exclusive knowledge you possess when it comes to the markets you serve. Continuously educate yourself on current trends and changing real estate regulations, and have relevant, trusted trade publications that you reference daily. 

2. Have the insider intel to find the best property possible

It’s imperative to cultivate and nurture relationships within real estate and ancillary industries. The agents, developers, and adjacent professionals you know will enable access to off-market properties and other opportunities that can make a huge difference to your clients. I maintain close ties with my former colleagues and clients in San Francisco and Silicon Valley, both of which are important feeder markets for the Napa Valley and Sonoma Wine Country regions I now represent.

3. Understand all relevant regulatory and tax implications

You should also foster a network that extends into the realms of law and finance. UHNWI trust agents to fully comprehend the tax implications of purchasing properties — particularly when it comes to overseas acquisitions — and to be able to connect them with experts in real estate law and tax planning.

4. Adapt your white glove service to suit the specific client

Tailor your services to each client’s personal preferences and objectives. Some may prioritize investment potential, while others are seeking a lifestyle change. Adapt accordingly, and offer concierge services that go beyond the transaction, such as property management, renovation coordination, and introductions to local amenities and services.

5. Instill confidence by keeping your business confidential

Finally, discretion is paramount. UHNWI place value on privacy and tact, and the agents who build a strong reputation among these buyers are the ones who are considerate, judicious, and prudent in how they respond to requests and disclose information.

Help your clients achieve their secondary homeownership goals

The globalization of business, the unprecedented ease of international mobility, and the desire for the highest quality of life — all of these factors have come together to increase the demand for secondary homes among UHNWI. And luxury agents who can deliver the most bespoke services are well-positioned to connect with new clients and expand their business.

With more than $3 billion in sales, combined with her unique focus on Wine Country luxury real estate, Ginger Martin’s portfolio of luxury homes, vineyards, and estates is extraordinary. A founding associate of Sotheby’s International Realty’s San Francisco brokerage, she quickly secured her position in the top 1% of the firm’s agents worldwide. At $35 million, Martin and her team closed the highest valued residential real estate sale in the history of Sonoma County, followed by sales of the highest valued Napa Valley residential properties from 2011-2022. 

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• Source: https://www.inman.com/2023/10/09/why-high-net-worth-individuals-are-purchasing-secondary-homes/