Investment Opportunities Lake Tahoe
The commercial and investment market in Lake Tahoe and Truckee has followed the strong sales trend we experienced in second-home sales. Record sales and rising equities have made people very bullish about investing at Lake Tahoe. However, when buying an investment property in Lake Tahoe and Truckee, there are many things to consider.
It is a business investment.
Buying a vacation property is often an emotional or lifestyle purchase. You may be drawn to the charm of a specific location or search for something that matches the lifestyle you desire at Lake Tahoe. However, an investment purchase is a business investment.
The property that can offer the greatest opportunity for the highest return on your investment is always your best choice. While an Old Tahoe cabin may be more appealing to you personally, there are an influx of people with different economic profiles and all are seeking to make Lake Tahoe their primary residence.
Consider rental options.
You may need to consider whether you would be renting your investment property short term or long term. Vacation rentals usually rent at a higher daily rate, but require more effort in managing the rental. Additionally, some areas are experiencing moratoriums on short term rentals because of the lack of housing for locals.
It is important to work with an agent who can help you determine which type of property will suit your needs. While Lake Tahoe used to experience high and low seasons, today, the demand has reduced what used to be the shoulder season or slow season. Where a 5-month ski lease during winter might be good for someone who would like to enjoy the home during the summer, as an investment purchase, it may not be your best rental option.
Devise a good investment strategy.
Over-improving a property is a common mistake many buyers and eventual sellers make. Prices drive sales and many buyers will want to improve the property for their own needs.
The best investment strategy occurs when you own the property free and clear and receive a positive cashflow. While you will want to make needed repairs and ensure the property is in good condition, your positive cash flow is better spent paying down your mortgage.
Buy or build.
You will have the option to buy an existing income producing property or to build one on any one of the lots that are currently available for sale. In some cases, you can do both. I currently have a listing on a large parcel that already has 4 rented units. It also includes room to build an additional 8 units.
This is an excellent opportunity for an income producing property with room for expansion. The current offering consists of 2 duplexes, for a total of 4 units. Each of the 4 units is a 3 bedroom, 2.5 bath with a 1 car garage. The current long-term tenants have been switched to month-to-month leases. Preliminary review from the Town of Truckee indicates the ability to build an additional 4 duplexes (8 units). Property is not sub-dividable. Asking price: $2,999,999.
Owning a rental property at Lake Tahoe.
The pandemic changed how many people work and live. Zoom, Skype and video conferencing have allowed people to work remotely. Many are choosing to make Lake Tahoe their primary residence. Websites like Zillow for long-term rentals and VRBO and Air B&B for short term rentals enable homeowners to easily rent out their investment properties.
Our area is experiencing a shortage of available rentals. If you have ever considered purchasing an investment property at Lake Tahoe, there has never been a better time.
Contact me today to learn more about all of the commercial and investment opportunities that are currently available in Lake Tahoe and Truckee. I can help you maximize your investment objectives and walk you through any ordinances or requirements to make your purchase stress free.