Park City is a prime location for buyers looking for a second home. With the ski season in full swing, visitors are flocking to the area on vacation. As you know yourself, it’s pretty easy to fall in love, and it’s not long before thoughts start to enter your mind of owning a home here. Four seasons of endless outdoor recreation, entertainment, fine dining, and close proximity to a major city and airport make it an easy choice.
Buying a second home is similar to buying your primary home, although there are a few important differences to consider before you embark on this investment.
We’ve put together a few questions for you to answer before you start your search. The answers will help lead you in the right direction.
What is your budget? Determine your budget in advance. Meet with a lender to get pre-qualified for a second home before you start your search. In the Park City area, in particular, budget will not only determine size of the lot or home, but location.
How will you use the home? Will you plan to come several months a year? Several weeks a year? With additional guests? Do you hope to retire in this home eventually? These questions will lead you to determine the number of bedrooms and baths, floor plan and location. For example, if your kids plan to bring friends, you might seek out a home with a good sized bedroom to turn into a bunkroom. If you plan to retire to your second home, you may not want a home with a lot of stairs or levels. Plan to keep a car here? A private garage should be added to the list.
Will you place the home in the rental market? Renting out your home is a great way to offset expenses. Generally, vacation rentals can bring income but it may not be steady throughout the year, nor from year to year. If you plan to have it cover all of your costs of owning, you may need to reconsider your budget. Rental income estimates need to be very conservative to be safe.
Who will care for the property while you are not there? If your primary residence does not allow you to get to the property each week, you will need to hire a property manager to do weekly checks, take care of repairs, and handle rental issues if applicable. You may want to interview managers during your search, and also make sure the property manager fees are in the budget.
How will you finance the second home and handle for tax purposes? Second home financing, and taxes, are two of the areas that are most different from your primary home. Mortgages for second homes typically carry a higher interest rate. When using the home for income, you will need to consider the taxation of this income and the regulations surrounding a second home investment property. Talk with your lender and a tax specialist to have them provide you with any information you should be aware of before you buy.
The more precise you are with the answers to these questions, the faster we can help determine which homes would best suit your needs and wants. We hope you take the step to make Park City your second home – we know you will be glad you did.