Seeing this debate, I have to chime in with some “real world” experience.
I bought and sold several homes and condo in two really different place from 2003 to 2007. San Francisco and Mission Beach. One thing that I learned about Mission Beach was that it’s a huge vacation desitination where people stay in vacation rentals at or very near the beach. For good or bad, this in the quite common. Turns out it is common in many beach communities all over the world. Who knew? Anyway, I had the opportunity to create CC&R’s and one the decisions concerned “should vacation rentals of a short term nature be allowed?” Well, I thought that rather than me guess about this and blow it, I should wait and see what the buyers wanted. Simple enough.
Well, come to find out, almost everyone who considered buying any of the units wanted the option to rent them as vacation rentals. I mean virtually everyone I talk to about it!! So, that’s the way I made them and they sold.
In SF, I considered buying into a TIC…they are about 30% less than the market for a std condo. But the draw back is that they are loaded with legal issues that prevent almost any options to the owner. That’s one big reason they sell at such a discount.
So my experience is that having options that allow for economic gain of the purchaser increases the value of the property to the purchaser. Wow, kinda like something outta Econ 101. Maybe that sheepskin wasnt a complete waste. If only I listened the first time!!!