Laurie Johnson

Things to Consider in Buying a Second Home

While buying your personal residence was a milestone to avoid paying rent, enjoy greater tax benefits and to build equity, there are different factors to consider when buying a second home.  I have prepared this buyer's guide to second home ownership to help you in making your decision to purchase.

Choosing Your Location

When buying a resort property, the location becomes important because you want quick and easy access to it. Second home purchases in Lake Tahoe are driven by the large feeder markets of San Francisco and Sacramento. The ability to drive only 3 hours to spend the weekend at your second home, makes Lake Tahoe and Truckee a popular location for second homes.

Other factors to consider in the location is the return on investment. Lake Tahoe and Truckee have enjoyed a steady incline of property values for many years. Because the area doesn't offer as much in the way of new developments, homes can appreciate because demand often outweighs supply.

The amenities of the area should also be considered. Whether you enjoy golfing, hiking, climbing, skiing, boating or paddle boarding, Lake Tahoe has it all. The area also has a diversity of 5 star restaurants and quaint shopping areas.

Within Lake Tahoe and Truckee, you will find a diversity of neighborhoods. Some properties come with pier and buoy access, others have other amenities like access to golfing and skiing. When choosing the right location, you may also want to view properties with easy access to National Forests for hiking. Think about the lifestyle that appeals to you when choosing your location to purchase your vacation property. This is the best way to find your perfect home.

Maintenance Costs

You also need to consider if you can afford the expense of a second home. It may be necessary to rent out your property when you are not using it to recoup the costs of resort home ownership. The area has many excellent property managers, and with sites like Air B&B and VRBO, renting out your second home has never been easier. The demand for rentals has consistently grown over the last few decades.

Of course, owning a home as an investment requires that you consider all of the costs. You will need to furnish and pay for the utilities to maintain the property. Snow plowing the drive way and other measures that winterize your home will also need to be considered. The normal wear and tear of renting out your home will also require maintenance.

Enjoying a home to retreat to as a way of getting out of the hustle and bustle of the city is definitely worth the costs of maintaining your second home.

Getting a Loan

Some people are able to use cash from inheritances or retirement funds when purchasing a second home at Lake Tahoe. However, the majority of homebuyers will need to get a loan.

In the same way you needed loan approval prior to purchasing your primary home, you will need to meet with a lender to understand your debt-to-income ration. The mortgage officer will examine what you owe, your current mortgage and debt against the income that you make. It is always a good idea to have a pre-approval when making an offer. This shows the seller that accepting your offer has less risks and will most likely close escrow.

A good rule of thumb is that many lenders will look for a correlation between debt and income not to exceed 36%. This means that what you owe does not exceed 36% of your income. I can help you find a good mortgage rep in Lake Tahoe or Truckee to help you get started.

Some lenders will ask for a higher down payment for the purchase of a second home. It is important to understand the current mortgage market in the area where you are looking to purchase your vacation property.

Lifestyle Choices

The purchase of a vacation home is often driven by lifestyle choices. Whether you are looking for a rustic cabin in the woods or modern architectural design, Lake Tahoe and Truckee have it all. Many properties offer ski in and ski out access. Other communities surround world class golf courses.

The Tahoe Conservancy has purchased many lots to preserve the natural forest and some properties enjoy this added privacy. Many neighborhoods are adjacent to either national parks or cross country ski areas. When choosing your second home, you might enjoy knowing that the only thing in your backyard will be trees and wildlife.

Many people enjoy purchasing condos in the center of ski resorts. Northstar, Squaw Valley and Alpine Village are examples of communities with easy access to shops and restaurants. Truckee, Carnelian Bay and Tahoe Vista retain the charm of Old Tahoe. Often buyers will choose properties because of lifestyle choices that can range from remote and private to an active social scene.

If you are interested in a lakefront or lakeview property, you will pay a premium, but the area offers many listings that range from peaks of the lake to lakefronts with private piers.

I would love to show you why I have made this area my home. I  am an expert on helping buyers understand the many lifestyle choices that are available when making a purchase.

Contact me today to arrange a time to take a tour of the area!





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