Demand is growing for vacation and investment properties that are priced below the $1 million threshold, according to a new report. But that’s a segment of the second home market developers have almost totally ignored.
While builders have more than satisfied the wealthiest segment of vacation and investment buyers, says RCLCO in its 2025 Vacation Home Investment Survey, they have failed to address the growing demand for lower-cost units.
The Bethesda, Md.-based consulting company found that roughly three out of five qualified survey respondents are searching for product under $1 million. For them, the company said, smaller, more affordable units with lock-and-leave convenience and investment income potential are a high-priority.
However, there is a supply mismatch, RCLCO says. In recent years, for example, only about 30% of sales have fallen below the million dollar threshold in key mountain resport markets.
Pollsters also found a growing willingness of buyers across all wealth levels to place their vacation homes into structured rental pools and utilize short-term rental platforms.
It used to be that many luxury buyers considered vacation properties as purely private retreats. But that attitude seems to be changing.
In what the firm called “one of the clearest findings of the survey,” it discovered that two in five respondents indicated that generating investment income is a major justification for their purchase. That’s up from 33% when RCLCO last conducted the survey in 2023.
The shift, the company said, is “likely driven by the abundance of professional rental management services.” As new vacation and investment home development expands, it says, turn-key rental management has become a critical decision factor for buyers.
Another factor, though, is “a generational divide” between age groups. “Younger buyers are more inclined to view rental participation as essential, while older buyers, who tend to be wealthier and can spend more time at their second homes, lean toward exclusive use,” the company explained.
Buyers also are showing more interest in branded properties with recognizable names, not just for their operational expertise and service standards, but also for their established hotel, lifestyle, fashion, and entertainment reputations. And golf seems to be regaining its appeal.
Four out five respondents said they are interested in branded residences. And they would pay a premium of 20% to 30% for the services and investment security their properties would provide.
Amenities are another key value driver in vacation and investment home product. They directly influence design, programming, and pricing decisions. And the survey found a pickup in interest in golf as “a noticeable trend.”
Golf is generally believed to be a flagging amenity, too expensive to play and too expensive to maintain. But the survey noted a particular interest in the sport among younger second home buyers. Nearly four out of five buyers 44 years old or younger said golf was either “very” or “somewhat” important, compared with two-thirds of respondents overall.
