The Pros and Cons of Buying a Condo in Tahoe as an Investment Property
Investing wisely is an essential component of planning for a stable, prosperous future. For many homeowners, the idea of buying a condo as an investment property is appealing. After all, buying a condo ensures that you’ll have a vacation home and can be the first step towards earning rental income.
Before you decide to buy a condo as an investment, spend time speaking with your realtor and mortgage banker. Working with professionals who are familiar with the greater Lake Tahoe market will help to ensure your success. Review the pros and cons of buying investment property in Lake Tahoe so that you know what questions to ask your realtor and broker.
Three Pros of Buying Investment Property in Tahoe
There are many excellent reasons to buy a condo in the greater Lake Tahoe area. Thanks to the stunning natural beauty of the Great Basin and the year-round recreation opportunities, you can take a vacation at any time of the year and still be in Tahoe when exciting things are happening. Consider these three big pros of buying an investment property in Tahoe:
- Investment properties in Lake Tahoe have the potential to bring in income every month of the year.
- Thanks to Tahoe’s rising popularity and its strong tourism industry, homeowners in the area stand to see an overall increase in property values in the long term.
- The greater Lake Tahoe area attracts major sporting and cultural events every year, providing an excellent rental climate.
Three Cons of Buying Investment Property in Tahoe
While buying investment property in Lake Tahoe can be a great idea, it’s important to take a realistic look at some of the drawbacks of buying this type of condo. Review these three cons before deciding to purchase an investment property in the Lake Tahoe area:
- Investment properties are considered illiquid assets, meaning that they can’t be converted into cash quickly should you find yourself in financial distress. Depending on what the market is like at any given moment, selling an investment property can take a few weeks or a few years.
- Buyers must carefully consider the total price of an investment property. Homeowners know that the cost of ownership is greater than just the monthly mortgage, insurance payment and utility bills. You’ll also need to think about maintenance, property taxes and how an investment property will affect your income taxes as a whole. Your mortgage banker will be happy to help you determine the total monthly expenses connected with an investment property.
- Finding and managing tenants can also present problems for investment property owners. If you live outside the Tahoe area, you may not be able to meet personally with potential renters and manage your condo. You’ll need to do so long distance or you’ll need to hire a company that can do so for you. It’s important to remember that it takes a great deal of time to manage a rental property. If you won’t be able to dedicate attention to getting the condo in order soon after you buy, this might not be the right time to shop for investment property.
As with any real estate transaction, taking your time to thoroughly evaluate the property and how well purchasing it fits in with your financial plan is essential. Be sure to explain your long-term financial goals to your mortgage banker. If you’re shopping for a home loan to buy an investment property, you’ll need to take additional factors into consideration. As your local mortgage bankers of choice, we’ll be happy to assist you with your investment property financing needs.