You purchased a second home or vacation home with the purpose of renting it out for additional income. You’ve lived in it a while, decorated it the way you want, furnished it with durable furniture ready for others to enjoy. Now it’s time to get it ready to rent out.
1. Make the home as livable as if you were living in it. Your tenants want to feel just as comfortable as you, so invest in good quality, durable furniture. Remove any furnishings that don’t exude a vacation vibe or experience. Make sure seating is comfortable and lighting is good and sets a mood.
2. Remove all personal items. Install in a locked cabinet or pantry, even storage, to put your personal irreplaceable items in when you are not there. Remove anything personal to avoid getting damaged.
3. Stock the home with basics for a full house. If your home sleeps six, then provide two of everything for each guest. Two bath towels, hand towels, linens, bed sets, plates, bowls, cups, glasses, etc. Don’t forget to provide a TV, stereo, DVD player and coffee maker. All the normal comforts of home.
4. Hire local reliable property management services. You don’t want your property manager to be out of town when you are out of town. No one will be watching over your investment. Make sure your property management company is local, close to the property if not on-site, and only a phone call away. They are your eyes and ears while you are not living in the property. Get references from others who have used them in the past.
5. Set your visits on the calendar now. If you want to be assured your home will be available when you want to visit, make sure you put that on the rental calendar now so that it doesn’t get booked when you want to enjoy it. Even if it’s only tentative bookings, at least something will be down in writing and you can always change it later.
Sonja Bush is a Resort and Second Home Property Specialist, ready to help you find, purchase, or sell your Vacation Home or Second Home. Call her today at 661-979-9000 or email her at [email protected] with whatever your Second Home and Vacation Home needs are.
If you have ever gone on vacation to a resort property, the odds that you have dreamed about owning a vacation or second home are very high. The many options available to prospective buyers can be dizzying. Amenities such as championship golf courses, world-class skiing, and private airstrips are just a few of the options available these days in many resort communities.
Purchasing a resort property needs to also be about the right fit for your lifestyle, what you can afford, and what the resort affords you.
The Do’s of Shopping for a Vacation or Resort Home
- Do make a budget and consider your finances before shopping for property.
- Do interview potential real estate agents to assess their knowledge about second homes and vacations homes.
- Do visit the property more than once – visit at different seasons, winter/summer, daytime/nighttime.
- Do consider resale value, even if you don’t think you will ever sell.
The Don’ts of Buying a Vacation or Resort Home
- Don’t give in to your emotions before you are 100 percent certain this property will be the destination for your future vacations.
- Don’t drain your retirement accounts to purchase a second home or vacation home.
- Don’t hire your primary residence real estate agent if they don’t have any specific knowledge of vacation home sales in the area you are looking to purchase.
- Don’t buy a property on the first visit or while on vacation to the resort community. Make it a sound business decision, not one based on your emotions – see the first Don’t.
What is the Purpose of Your Vacation Home?
You will also need to consider the primary reason for buying a resort property. Will it be your primary residence, an investment, a weekend retreat, or maybe a retirement property? Make this one of the first questions you ask yourself, before looking at any property.
If the property will be for weekend use, it needs to be within a few hours’ driving distance. If it will be for retirement, then it needs to already be or be able to be made accessible, and be located near medical facilities. If the property will be for rental income, it needs to be near a popular ski resort, lake, or river.
Extra Costs to Factor In
Vacation or second homes have expenses that your primary residence may not have. Costs such as travel to get to the resort, maintenance, especially if it will be a rental property, vacation home insurance, and property taxes, all have to be factored into resort living.
Hire a Real Estate That Specializes in Vacation or Second Home Properties
A resort real estate agent should have the RSPS or Resort and Second Home Property Specialist Designation. This ensures they have been trained extensively in resort living, how to buy and sell second home properties, and the nuances involved in resort communities. For example in Mammoth Lakes, a qualified real estate agent can advise whether the property is allowed nightly rentals should you choose to rent the property when you are not there. They should also know the area very well that you are considering. If you determine that the real estate agent you are talking to about resort properties does not have this knowledge, immediately find someone who does, otherwise you could be steered into a bad real estate deal and no one wants that.
How are your personal finances?
If you are not paying cash for your vacation or second home property, most lenders will required buyers to put down between 20 and 25 percent on a second home. Use the online mortgage calculator on my website to get an estimate of how much you can afford, how much you will qualify for, and how much two mortgages will cost you if you currently hold a mortgage on your primary residence.
Sonja Bush is a Resort and Second Home Property Specialist and is ready to answer any questions you may have about resort living, the Mammoth Lakes area in general, or about the current real estate market in Mammoth.
Since most property buyers start their search on the internet, why not head over to Sonja’s property search page on her website to see what properties are currently available in the Mammoth Lakes area. Sonja can be reached by calling her at 661.979.9000, or emailing her at [email protected].
Transient Occupancy Tax (TOT) is a 13% tax that is paid by the guest to the operator of the transient facility at the time the rent is paid. The Town of Mammoth Lakes is responsible for the collection of transient occupancy taxes and has a team dedicated to providing effective TOT enforcement and revenue collection services. It is basically a pass-through tax paid by the guest and passed on to the Town.
TOT makes up approximately 60% of the Mammoth Lakes General Fund. The monies fund services such as snow removal, recreational programming and road maintenance.
There has been a lot of press in the last year about the TOT. Keep in mind the full-time resident population of Mammoth Lakes is around 8,200 and we have 30,000 – 60,000 visitors over peak periods. A few simple calculations and it is easy to see why TOT is so important. The major challenge over the years has been enforcement. TOT existed and although the property management companies complied, many of the VRBO (vacation rental by owner) did not. Quite frankly most people knew it was illegal to not remit the TOT to the town but there were no consequences for not complying.
To make matters confusing, there are some areas of town where transient rentals are not allowed. Most of these are single-family homes in residential neighborhoods. Again, with no consequences for not complying with the zoning requirements there is illegal activity.
In 2012, city officials along with Town Council, implemented a few things to help the situation. The team was formed to educate, enforce and collect TOT. Informational articles and advertisements were placed in the local papers, letters were mailed to homeowners, a hotline for questions and reporting illegal activity put in place, and informational meetings were held in the community. In addition, a new local disclosure was implemented for use by real estate agents to inform property buyers of the TOT and the zoning of the property they are purchasing. A website was launched (https://gis.mono.ca.gov/tot) where after entering the property address, the zoning information detailing whether transient rentals are allowed is displayed.
Additional information (including the full ordinance) can be viewed at http://www.ci.mammoth-lakes.ca.us/index.aspx?NID=201.
There are so many great developments in Mammoth Lakes. Besides understanding your budget, it is important to clearly define your goals for the property. Key things to consider include:
1. Will you be renting out the property? If yes, occupancy rates and property management fees should be taken into consideration and these vary by project. Consider how often and when you will be using your property.
2. Are you a “summer” or a “winter” fan? Specifically, what are your interests? Although Mammoth Lakes is relatively small and you can be anywhere in a few minutes, being closer to your favorite activities is nice. For example, is ski in/ski out access important to you? What about easy access to the shuttle?
3. Do you have children? There are some projects that have more entertainment options for children. Many clients with children like to be in or near projects in Mammoth where there is a heated pool, arcade or other child friendly activities.
4. Do you want to want to be in walking distance to dining and shopping or do you prefer to be more off the beaten path? Some prefer to stay in the center of action where they can simply “park and play” without ever using their car. Others like to be within walking distance to shopping but want to be more remote during most of their time in Mammoth Lakes.
5. Will you be financing or paying cash? Make sure the project you are interested in has financing available. Knowing in advance which projects are cash only can save you time and help you avoid wanting a property that cannot be financed.
Most of the above questions are common sense but many people have not thought through what is important to them. A qualified real estate professional can help you find a vacation condo in a location that best suits your needs.
For previous articles, visit www.sonjabush.com
Clients visiting our office often ask for a list of “all available properties.” The first question I ask is to determine whether they will be renting out the property. Only some areas within the Town of Mammoth Lakes are zoned transient rentals (check the town’s website). Many people are not aware most single family homes cannot be rented out on a nightly basis. This narrows the search considerably.
After discussing the pros/cons of various areas, the next step is for the potential buyer to determine goals for the property. If income/cash flow based, ask your agent for any receiveables provided by the seller. Keep in mind most of these reports show “gross” income and there will be a percentage you will pay to the property management company plus any utilities or fees not included in the Home Owners Associate fees.
Property management fees vary greatly as do the services provided. Some fees can be as high as 60% of gross income but often these offer greater name recognition and advertising presence which could increase the number of rentals booked for your property.
Ultimately your short and long term goals are key in selecting the property. It is easy to get swept up in the emotions – my advice is to slow down and secure a real estate agent in your pursuit to make an educated decision.
Broker Associate – DRE #01904399
The Village at Mammoth