While the allure of vacation or second homes in Phoenix, Scottsdale, and Tempe (also known as the Valley of the Sun) may not always live up to expectations, they can still be wise investments if approached with caution. So, to make an informed purchase and maximize your investment, it’s important to be aware of a few key factors.
Firstly, consider how frequently you plan to visit or if you intend to rent out the property when you’re not using it. Additionally, take into account these six considerations that may impact your decision when buying a second or vacation home in Tempe, Phoenix, Scottsdale, or anywhere else in Arizona.
Location Matters the Most
If your residence is located a considerable distance away, you may find yourself less inclined to frequently commute or fly as often as you initially anticipated during the planning phase. The location of the property also holds significance for potential renters, particularly in sought-after areas such as Silverleaf, Paradise Valley, North Central Phoenix, Downtown Phoenix, Mill Avenue – Tempe Town Lake, Old Town Scottsdale, and others.
Determine the Rules and Costs Up-Front
Hidden expenses can accumulate rapidly when embarking on a journey to a vacation home that requires several hours of travel. In addition to the cost of transportation, whether gas for your vehicle or a plane ticket, various other financial obligations must be considered. These include the requirement to fulfill any HOA or condominium fees that may be applicable, pay taxes on a vacation or second home, cover the expenses of year-round utilities, or furnish an entire home. Additionally, there may be additional costs associated with landscaping or maintenance, as well as property management fees, if the home is being rented out.
Furthermore, specific regulations and restrictions may exist if you are purchasing a vacation home within a residential community, . In certain instances, you may be unable to rent out the property, which could significantly impact your ability to afford the vacation home. Consequently, this limitation will influence the potential locations where you can consider purchasing a property.
You Might Have to Pay to Get the Property Cleaned
If you are renting your home, you will be responsible for the maintenance and cleaning. Managing rentals for a second home can be time-consuming and involve tasks such as guest communication, advertising the rental, utilizing second home rental websites, or even hiring a property manager who will take a percentage of the profits.
Furthermore, vacation homes are often targeted by thieves because they are typically unoccupied. However, there are many safe areas in Tempe, Phoenix, Scottsdale, and throughout Arizona where you can find peace of mind. A simple conversation with your neighbors can help keep an eye out for any suspicious activity. Typically, Arizona has a friendly and supportive community that looks out for one another, especially their neighbors.
Don’t Expect a Good Deal
After a prolonged period of decline, the housing market has rebounded in many parts of the United States to levels seen before the recession. Among the top real estate markets, Scottsdale, Arizona (including T/O, Tempe, and Phoenix) faces its own set of challenges, such as limited inventory, higher prices, and intense competition. If you are considering purchasing a vacation or second home, be prepared to pay more now compared to a few years ago. Despite rising home prices, the current market still presents favorable conditions for buyers.
In fact, there are still opportunities to find deals, and I have the expertise to locate them. However, it may require more time and effort than initially anticipated, especially if you are searching in a location that is hours away from your current residence.
Know the Reason behind Buying a Second or Vacation Home in Arizona
Are you in the process of purchasing a second home or vacation property with the intention of downsizing and eventually living there full-time? If this is the case, the considerations you need to take into account will be quite different compared to buying for investment purposes. It is important to carefully evaluate the pros and cons in relation to your personal reasons for acquiring a second home in order to make an informed decision.
Know Which Type of Property You are Buying
Finally, have a clear understanding of the specific kind of real estate you are purchasing. Each type offers a unique and enjoyable lifestyle.
- Condominium (Condo): Typically, it is more affordable than purchasing a similar house in the same area.
- Single Family Home: This type of property has proven to be a secure investment over time. Moreover, unless you are part of a Homeowners Association (HOA), you have the freedom to make decisions about your own house without anyone else’s interference.
- Retirement Home: Specifically designed for individuals aged 55 and above, retirement homes offer various lifestyle amenities catered to this age group.
- Penthouse: This is a luxurious and spacious apartment typically located on the top floor of a building, offering breathtaking views and an elevated level of privacy and exclusivity. But these are very expensive.
- Townhouse: A townhouse is a type of residential property that typically shares walls with neighboring units and often offers multiple floors of living space.