Ten Questions Every Tahoe Second Home Buyer should Ask

September 24, 2016 By Laura Allen, Broker Associate, Tahoe Real Estate Agent, CA RE 01473598 | 530-414-1260

Ten Questions Every Tahoe Second Home Buyer should Ask

Here are the ten (10) questions every North Lake Tahoe – Truckee Second Home Buyer should ask before they make an offer!

1) Is this property located in a Planned Unit Development (PUD), or Master Community that comes with a mandatory Home Owner Association (HOA)? If yes, what are the HOA Fees? How often are they billed? Current Special Assessments – how much and how often are they billed?

Tahoe Home owners like access to recreational amenities (beaches, pier, buoys, pool, tennis courts, etc…) but they sometimes forget that when buying a single family home with recreational amenities/access there will be a mandatory HOA (some HOA groups are optional in our area) that will come with rules, regulations, and fees. Most PUD’s, or HOA groups in our area bill on an annual basis.

In addition asking what the current HOA fees are for the neighborhood you are considering buying into, always ask if there are any current, past, or proposed special assessments that a new owner would be responsible for and how will that special assessment be billed.

Remember in the Tahoe area homes are located in mandatory HOA’s and there are optional HOA groups where membership is restricted by geography property ownership. Think of the optional HOA groups as a Country Club group, as they do not fall under the CA Civil Code requirements for disclosure rules. HOA groups may also have a base membership fee and then charge extra for additional amenities/services.

For example: A home located in the Tahoe Donner neighborhood in Truckee, has a mandatory HOA fee for all property owners, and then they offer an additional fee option called the “Rec Pass”, which gives up to four members in a household unlimited access to private amenities rather than paying the daily rate.

On the lake side many local neighborhood HOA’s offer use of a buoy, or kayak storage for an additional fee, in addition to the annual fee everyone pays.

Buyer Tip: Making sure the fees quoted on-line (Multiple Listing Service (MLS)) include all fees, or you get a breakdown of add-on changes. For planning purposes, it is important to know all of the pieces of information.

2) Is there a Private Transfer Fee? If you are buying into a PUD/Master Planned Community, or a neighborhood that has an optional HOA group do they have a private transfer, and/or doc prep fees.

In addition to the HOA Transfer Fees, in some of the newer developments in the Lake Tahoe – Truckee area there can be a Private Transfer Fee that is a percentage (%) fee of the final sales price. Not all developments have this additional fee, so ask!

3) What does the HOA fee(s) Cover? Not all HOA fees cover the same items, some include snow removal on the streets (some include driveways), common area insurance, maintenance of the HOA buildings, maintenance of the grounds/common area/parking/road maintenance, shuttle services, professional accounting/HOA management, annual clean-up dumpsters (seasonal trash removal), subdivision water, just to name a few items.

Buyer Tip – Are there special add-on fees for classes, events, food, water, golf, tennis, lessons, storage, you get the idea.

4) Does the roof type make a difference when it comes to getting home owners insurance? Getting fire/hazards insurance has become a challenge in the North Lake – Truckee area.

If the home has a wood shake-shingle roof you may find it very difficult to get home owner insurance. Homes that have composite, or metal roofs have not had as much difficulty getting fire/hazards insurance, but your insurer may require you to put on a new roof within 90-120 days after starting the policy if the home has a wood shake shingle roof on it.

If a home has a wood shake shingle roof be sure to ask your real estate agent if the current owner has received any roofing bids, if not, will they be able to help you get a new roof bid while you are in your investigation period and it can be a negotiation item.

Buyer Tip – Start working on getting insurance as soon as you know you are going to make an offer on a property. You may find that your current home insurance company for your primary residence will not write a new policy in the Tahoe area, so the more time you set aside to deal with home owner insurance, the better.

5) What is the water supply for the property? Most of the time we turn on our facets and water just appears, we don’t think about how it is supplied, but not every home is on a public utility department (PUD) water system in our area. Water can be supplied by a PUD, a small private water company, or by a shared/private water well. Ask who supplies the water for the property you are considering buying.

6) Is there a Bear Box? In your primary home market you probably roll out the trash barrels once a week, and we do the same here in Tahoe, but what do you do if you aren’t here on Wednesday to roll your trash out? Answer: A Bear Box!

A Bear Box is a metal container that can hold up to two trash cans in it. It’s called a Bear Box because it most likely has been made out of metal and has a special way for you (humans) to open it. The enclosed box is designed so that our local bears can’t get it open and spread your trash all over the neighborhood.

A property that is on a vacation rental program needs to have a bear box on it, and while it isn’t required, if you’re a second home owner, chances are you’ll want a bear box so you can leave your trash behind in a secured container. If you don’t then you’ll be stuck hauling your used stinky garbage back home with you.

7) Is the subdivision development completely built out? Some of our newer subdivision developments in the North Lake Tahoe – Truckee are not completely built out. Even developments that were started back in the 1970’s are still not completely built out.

What that means to a Tahoe Second Home buyer is at a later date those uncompleted single family lots around you could be built on, which means the value of your home could be impacted by the new construction home(s) and you could have several years of construction noise, debris, and the number of owners using common recreational area facilities could increase.

Buyer Tip – If you see what appears to be vacant land next to, or behind the home you are considering, be sure to investigate who owns what, and is it buildable. Open space is great, but if it has been allocated for future building, you need to be aware of what could happen down the road.

8) Can you fence your property in? If you have pets, or want the privacy that a fence can provide, not all areas allow for a property to be fully fenced in, or even just the back yard area. Be sure to ask about fencing, if this is important to you.

9) Are short-term vacation rentals allowed? In the North Lake Tahoe – Truckee area you’re more likely to be interested in the short-term vacation rental policy. Even if you don’t plan to rent your place out, you’ll want to know if your neighbor can, so ask, or check with local government agencies to find out the current rules and regulations. While the county, or town may allow rentals if you are buying in a PUD/master planned community they may not allow them, or they may have a special rental tax that is in addition to the Transit Occupancy Tax (TOT) so ask about restrictions, local rules, regulations and taxes.

10) Does the property have a fire suppression system, radiant heating, yard irrigation system, or any type of system that uses a back-flow device? You may not realize that if a property has a fire suppression system, in-floor radiant heating, or a yard irrigation system that those systems can come with a back-flow device that needs annual testing to make sure it is still working. What is the purpose of a back-flow device? It is to prevent bad water/additives from going back into the clean drinking water supply.

There are a lot of questions a Tahoe second home buyer will need to ask before they complete their real estate purchase. The ten questions every Tahoe Second Home Buyer should ask are questions to put on your home buyer list!

Ten Questions Every Tahoe Second Home Buyer should ask, or should plan to ask!

Thinking about making Lake Tahoe, California your second home? Check out the homes that are for sale here:

Want to see what condos are for sale in Lake Tahoe? Here are the current listings:

For all of your Tahoe real estate needs –

Laura A. Allen | 530.414.1260 | Laura@TahoeLaura.com
BROKER ASSOCIATE, Tahoe Real Estate Agent
CalRE# 01473598
Coldwell Banker, Tahoe City, CA CalRE#01908304

All information is deemed reliable, but is subject to change, and/or correction without notice.

All information is deemed reliable, but is subject to change, and/or correction without notice.
Buyers and Sellers should investigate and verify all information to their own satisfaction.

Ten Questions Every Tahoe Second Home Buyer should Ask

Ten Questions Every Tahoe Condo Buyer should ask

September 23, 2016 By Laura Allen, Broker Associate, Tahoe Real Estate Agent, CA RE 01473598 | 530-414-1260

Ten Questions Every Tahoe Condo Buyer should ask!

Here are the ten (10) questions every Lake Tahoe and Truckee Condo Buyers should ask before they make an offer!

1) What are the Home Owner Association (HOA) Fees? How often are they billed? Current Special Assessments – how much and how often are they billed? Costs are typically a question Tahoe Condo Buyers will ask, but many buyers may not realize there may be more than one HOA involved, and that fees may be billed on an annual, or quarterly basis and not monthly.

In addition asking if there are any current, past, or proposed special assessments that a new owner would be responsible for and how often are they being billed are important questions to ask.

Remember in the Tahoe area there may be more than one HOA fee for condos located in a master planned community, or planned unit development.

For example: a condo located in the Tahoe Donner neighborhood in Truckee, will have two (2) HOA fees. The first HOA fee will be for the individual condominium development. It could be billed monthly, or quarterly. The second HOA fee will be for the Tahoe Donner master planned community, and that fee is billed annually.

Buyer Tip: Making sure the fees quoted on-line (Multiple Listing Service (MLS)) include all fees. For planning purposes, it is important to know all of the pieces of information.

2) What does the HOA fee(s) Cover? Not all HOA fees cover the same items, but here are things to see if they are included: Condo building/common area insurance, exterior maintenance, grounds/common area/parking/road maintenance, snow removal (parking lot, paths, to your doorstep) professional accounting/HOA management, internet, cable, trash, water, sewer/sanitation, electric, gas, just to name a few items).

Some HOA fees are all inclusive, while others are bare bones, so ask what is covered so you can really compare HOA fees for similar complexes. A higher HOA fee that is more inclusive may be a better financial deal compared to a lower one that only covers the basics.

3) Are there usage restrictions? Will this condo development qualify for a loan? Some of our Lake Tahoe and Truckee condo developments do have occupancy (owner use) restrictions even though the condo is not fractional ownership and is 100% owned by owner.

In addition to occupancy restrictions, that will impact the ability of a condo development to qualify for conventional financing, there are other factors that can also impact a condo unit and its ability to qualify for conventional loans. Some developments are limited to cash buyers in our area, so if you need a loan to make your purchase be sure to ask this question!

4) Does the HOA fee cover doors, windows, and decks? In our area most HOA’s do not cover the doors into your unit, windows, or the top of the exterior deck surface, or deck railings. Some do, but most don’t and those expenses for upgrading, or replacing fall back to the unit owner, so when in doubt ask who pays for what – you, the unit owner, or the HOA.

5) Is there a HOA Transfer and Document Prep Fee? Many Tahoe HOA groups have a private transfer fees that are charged when ownership changes hands. The HOA transfer fee may be in addition to HOA doc prep fees (Davis-Stirling Act CA Civil Code 4000-6150 on HOA’s and their disclosure requirements), so be sure to ask if there is a HOA Transfer Fee.

As an FYI if the condominium development in located in a master planned community, there may be more than one HOA and there may be multiple HOA transfer fees, along with multiple HOA disclosures.

In the California Association of REALTORS (CAR) real estate contract that we use here in the North Lake Tahoe –Truckee area, we have specific HOA documents that addressed all of the disclosures requirements under the act so that buyers and sellers know what information should be provided.

6) Is there a Private Transfer Fee? In addition to the HOA Transfer Fees, in some of the newer developments in the Lake Tahoe – Truckee area there can be a Private Transfer Fee that is a percentage (%) fee of the final sales price. Not all developments have this additional fee, so ask!

7) Is the condominium or townhouse development completely built out? Some condo developments in the North Lake Tahoe – Truckee area were not completely built out when they were originally started. What that means to a Tahoe Condo buyer is that at a later date those uncompleted units could be built, which means the value of your unit could be impacted by the new construction units built and you could be impacted by construction noise, debris, and the number of owners using common area facilities could increase.

8) Are pets allowed? If you have a Fido in the family you’ll remember to ask about the HOA pet policy, but if you don’t have a Fido, this may be a question you’ll miss asking. Knowing the Pet Policy is important to know whether you have pets, or not.

9) Are short-term vacation rentals allowed? Are there restrictions on long-term renters? In the North Lake Tahoe – Truckee area you’re more likely to be interested in HOA policy on short-term vacation rentals, but it’s always important to ask about short-term and long-term rental rules and restrictions.

10) Is smoking allowed in complex? Perhaps a politically incorrect issue to bring up, but one that should be asked so you will know the HOA policy on what is, or isn’t allowed.

HOA Financial Review: While this isn’t a question you’ll need to ask, as the Sterling-Davis Act requires financial disclosures by all HOA’s that fall under the act, what you do need to be prepared for is reviewing and understanding the financial documents that are given to you by the HOA.

If you don’t have a strong financial document background, you’ll want to ask a local CPA if they, or a CPA they know of can do a review of the documents provided to you. You’ll want to ask how much, and how quickly can they get the review of their findings back to.

Review of HOA documents is limited during the inspection period, and often you’ll only have a few days to make your complete review, and ask questions. Lining up your CPA team now, or knowing who you will ask to review financial statements and financial audits will be a very important step in your Tahoe condo buying process. The bottom-line, you’ll want to know how well, or how underfunded a group may, before you make your purchase.

There are a lot of questions a Tahoe condo, or home buyer will need to ask before they complete their real estate purchase. The ten questions every Tahoe Condo Buyer should ask are some of the more common ones in our area!

Ten Questions Every Tahoe Condo Buyer should ask, or should plan to ask!

If you have more questions on buying, or selling a condo here in the North Lake Tahoe, or Truckee area, give me a call 530-414-1260. I can help you too!

Want to see all Tahoe City condos for sale?

Need more options? See what condos are for sale in Lake Tahoe? Here are the current listings:

For all of your Tahoe real estate needs –

Laura A. Allen | 530.414.1260 | Laura@TahoeLaura.com
BROKER ASSOCIATE, Tahoe Real Estate Agent
CalRE# 01473598
Coldwell Banker, Tahoe City, CA CalRE#01908304

All information is deemed reliable, but is subject to change, and/or correction without notice.

Ten Questions Every Tahoe Condo Buyer should ask!

Vacation Rental Income for North Lake Tahoe – Estimates

September 15, 2016 By Laura Allen, Broker Associate, Tahoe Real Estate Agent, CA RE 01473598 | 530-414-1260

Vacation Rental Income for North Lake Tahoe – Estimates

Vacation Rental Income for North Lake Tahoe – Estimates: What potential home/condo buyers and investors should know when it comes to generating short-term vacation rental (less than 30 day stay) income in our resort area.

I am often asked by North Lake Tahoe and Truckee home/condo buyers and investors what they can expect to generate in short-term vacation income on their North Lake Tahoe, or Truckee property as part of the Tahoe home buying process.

While I am not a vacation rental agent and I do not run a vacation rental company, in general, this is what a potential home/condo buyer, or real estate investor should expect when it comes to generating short-term vacation rental income in the North Lake Tahoe – Truckee area.

There will always be exceptions to this analysis and over-view, but historically this will most likely be the situation when it comes to generating vacation rental income for the North Lake Tahoe – estimates for our area.

As a buyer looking for rental income, always investigate the information provided and talk to a vacation rental manager on what you could expect on the specific vacation/second home you are considering buying.

What is the Bottom Line? For those that want the quick answer, here you go!

Most properties will not cash flow positive in the North Lake Tahoe – Truckee area if carrying a loan.
Best case for a rental property is a break-even situation (no loan). Most properties will come up short on rental income paying for their operating expenses (see list below of potential expenses to be covered), but some may pay for operating expenses/taxes and generating some positive income.

What is meant by break even?

Pay annual property taxes. Learn more about property taxes in our area here | Mellos-Roos Taxes
Normal operating expenses (utilities, homeowner insurance, snow removal, and Home Owner Association (HOA) fees if applicable).
Assume HOA does not have a special renter use daily, or per stay visit charge for amenities. If HOA does that charge is paid by the renter.
Assume property is a cash sale and there is no type of mortgage payment.
Assume you’ll pay some type of government permit for being a rental, and you might have to pay someone to be on-call to go to the property if there is a complaint/problem.
Assume renters pays the Transit Occupancy Tax (TOT) and any other special additional occupancy tax that is charged on short-term rentals (example Town of Truckee has an additional 2% tax to the 10% and the Village at Squaw Valley has an additional 2% tax to the 10%).
Assume renter pays the cleaning fee.
Assume property owner is paying a professional rental company management fee of 25%-50% of gross rental revenue generated on the property.
No capital improvements or major repairs are needed

Why won’t your North Lake Tahoe – Truckee property cover expenses and cash flow positive?

Occupancy Rate – Seasonality: Unlike other resort destinations that have a steady year-around demand (limited off-seasons), the North Lake Tahoe – Truckee area is a tourist destination that has two short, high-peak-seasons (Premium Rate Seasons).

Summer: 45-60 days (Father’s Day in June – Labor Day – September)
Winter: 45-60 days (a couple of days before Christmas through the end of February)

While the demand for vacation rentals will happen before and after these high seasonal periods, the demand for vacation rentals tends to be limited to the weekends (one-two night stays). The pre/post high season demand continues to declines as we move closer to the next high-season start date.

Occupancy Rate: 90- 120 days (annual use), which is 25% – 33% on an annual rate. While a higher occupancy rate may be possible, remember booking rates will drop in non-prime season rate.

As a general rule of thumb, for planning and budgeting purposes only, using 100 rental days a year, has been historically a good planning number to use for estimating annual occupancy rates in the area.

Why the lower Occupancy Rates? Unlike other resort destination areas (even within the Lake Tahoe area), the North Lake Tahoe – Truckee area is not a convention destination area for large groups.

It’s part of the charm that the North Tahoe area offers – restricted development, but it also means we don’t have large meeting facilities that can accommodate thousands of event goers in this part of the Lake Tahoe area (South Lake Tahoe and Incline areas are not considered part of the North Lake Tahoe – Truckee area), which means the off-season demand, that could be off-set with larger group/industry events is not an option for our home owners.

Weather Conditions – Seasonality Demand: The North Lake Tahoe – Truckee area is an outdoor recreational area and we are dependent on good weather conditions.

If we have a poor snow year, you’ll see a drop in demand for winter vacation rentals.

If we don’t have good summer weather conditions, you will see a drop in demand for late summer vacation rentals.

Room Rate Pricing: Peak seasonal pricing is reflected in the accommodation rates, but those rates are limited depending on your location, condition of your property (luxury, high-end features and competitive with newer construction) and time of year.

Ski-in/Ski-out will command top dollar pricing and demand at a ski resort during the winter season, but will have little appeal in the summer months, and will most likely rent at a significant discount.
Lakefront will command top dollar pricing and demand during the summer months, but they will have less appeal during the winter months depending on how close they are to local ski resorts.
A cabin, mountain home, or condo on the Lake Tahoe area will typically generate income in both high seasons, but the farther away from the ski resorts the less appeal those properties may have for the winter renter.

Government and HOA Rules: Government and Homeowners Association rules are a moving target in the North Lake Tahoe – Truckee these days. The short-term rental market that once had few regulations has seen either their counties, incorporated towns, or homeowner association create new rules, regulations, and in some cases restrict rentals, or prohibit them all together.

All it takes is for a homeowner member to feel outnumbered by the renters, have a rude encounter, or not get a lounge chair by the pool because the renters are taking over the facilities to bring up a vote with the HOA to restrict, or not allow renters to use the common area facilities at all.

If you are looking to buy a property in either a condominium/townhouse development or within a single family home subdivision that has recreational amenities, the ability to do short-term rentals may be restricted, have significant rules, or your rental guests may be restricted from using HOA facilities, and/or be charged an extra fee to access them.

Once a homeowner group restricts access to beaches, or a pool area, the desirability for your property may drop dramatically, forcing you to re-look at your rates that once commanded a premium.

You should always be cautious in your rental forecasts and be prepared for changes in those rules. I think it will become more restrictive, and there will be more rules not less moving forward as the local full-time rental market continues to lack supply.

Here are some links about vacation rental rules for some of our areas. Note the COVID-19 situation may have altered, or impacted these rules, check for the most updated information.:

Buyer Tip: Know when rental revenue is generated for the property you are considering.

If it is possible, potential buyers should review past rental histories and see when most of the rental income is generated.

Is it year-around, with most in the prime high-seasons? Does one season bring in more than the others? Is one season dominated? Is the property just rented out only during the holidays? Is the current owner doing “ski leases” to round out income?

What is a “ski lease”? A ski lease is a 2-6 month rental that takes place beginning as early as November and as late as January (right after Christmas/New Year Holidays). The renter pays a monthly rate that is at a slight premium to what a long-term renter would pay, but is less expensive than renting out on a nightly basis.

The ski lease renter often pays utilities and snow removal; however, depending on the rental amount those items may be included in the lease.

A ski lease is appropriate for an owner that is not going to want any personal use time in the winter.

So let’s do an example so you can see how the numbers “pencil” out.

Vacation Rental Income/Cost Example:

Assumptions: Purchase price $500,000 for a 3 bedroom, 2 bathroom, 1,500 square foot cabin (no garage) in Carnelian Bay that sleeps 8 people (2 per bedroom, and 2 on the pull-out sofa sleeper).

The property condition: An open great room floor plan with vaulted ceilings and is upgraded with hardwood floors in the living room area, newer carpet in the bedrooms/hall, a newer kitchen with solid granite counter tops, stainless appliances, updated bathrooms, flat screen TV’s and furnishing that are mountain style, tasteful and less than 10 years old, and in good “like-new” condition.

Annual Short Term Vacation Revenue Estimate Before Taxes and Expenses:

$8,750	25 Holiday Rate days at $350/night	Christmas & New Year’s – 12 days, Martin Luther King -3 days, Presidents Week-7 days, 4^th of July – 4 days
$3,000	10 Average Holiday Rate days at $300/night	Memorial Day-3 days, Labor Day-3 days, Thanksgiving-4 days
$5,775	21 days at High Season Summer nights $275/night	21 summer rental days (3 weeks not including holidays)
$5,775	21 days at High Season Winter nights $275/night	21 winter rental days (3 weeks not including holidays)
$3,500	20 Off-Season $175/nights	20 off-season days (10 weeks of 2 night rentals)

$26,800 gross rental	97 Total Days (target 100 days of rental use)
-$7,504 Rental Fee	Less Management fee of 28%
$19,296	Gross Income to Owner before any expenses
$19,240	Annual Expenses	See Expense Breakdown Below
+$56	Potential Profit

Here is an estimate on potential costs. Costs will vary depending on the actual PUD, energy condition of the property, and actual use, but are good working averages for initial budgeting purposes as of 09/15/2016.

Annual Expenses:

$6,250.00/year	Annual property tax: $500,000 at 1.25%
$2,400/year	Property Insurance includes landlord coverage (renters coverage) – assumes you can get a regular single policy. If you end up with the California Fair Plan and a Differences in Condition (DIC) two policies for coverage for this example you may be closer to $4,000+/year. The cost for fire/homeowner insurance can be very expensive in our area,, and is very location dependant. This should be an item to be checked on right away on the potential cost.
$550/year	Snow Removal – Depends on how long the driveway is and the location of the property. This price assumes a parking pad/short driveway large enough for 2 cars.
$1,020/year	Water/Sewer $85/month
$310/year	TTSA Sanitation $155/6 months
$1,800/year	Trash $75/month – 1 can
$1,560/year	Cable: $130/month
$600/year	Internet: $50/month
$2,600/year	Gas $100/month for 5 months and $300/month for 7 months
$950/year	Electric $50/month for 5 months and $100/month for 7 months
$1,200/year	Misc. Small Repairs/Replacement $100/month
NA	If your property belongs to a homeowner association (HOA) for recreational, or master-planned community add that cost here.
$0	Cash Sale – No Mortgage

$19,240	Total Annual Operating Expenses

* Approximate percentage, good for planning purposes and for your first year of property taxes. Additional transit occupancy taxes (TOT currently as 10%) and additional special taxes to the business improvement districts (Town of Truckee 2%, Village at Squaw Valley 2% as examples) or HOA’s special charges (per renter per use, or per stay) have not been included, but those special taxes/use charges will have to be paid in addition to special permits/taxes and will vary by the location of the property and have NOT been included.

You can see why a break-even is a reasonable assumption when it comes to vacation rental revenue estimates and planning for cash-flow.

Are there properties that will generate more income? Yes! However, there are others that will generate less.

From a budget/planning standpoint, based upon what properties in our area have typically generated on an annual basis, this is a reasonable approach.

Costs will vary with use and property managers.

This is an illustration on why vacation rental properties are potentially break-even situations with no mortgage.

One item that will be a variable for property owners will be the management fee. Owners that choose to do their own property management, or go with a vacation rental model that passes part of the property management fee back to the renter (service fee) will improve their rate of return.

However, owners will find that lining up the professional cleaning will be their biggest hurdle (limited work force) and is the hardest part of the management process for owners that do not live in the area. What happens when your cleaner doesn’t show up, or takes the holiday off?

Tips for New Tahoe Owners:

- - If the property you are buying is already on a rental program, stay with that property management company for at least the first year you own the property. It is your best opportunity to learn the ropes, and keep income coming in.
  - Meet with the rental management company at your new property and get their suggestions on ways to improve the property, rental appeal and income.

Buyer Tip:

- - As a reminder, Tahoe Buyers should always conduct their own investigations and analysis on any property they are considered buying and satisfy themselves on the information they have gathered, or have been provided by third parties as real estate agents do not verify any third party information.

If your goal is to cash flow positive a property here in the North Lake Tahoe – Truckee area, this is mostly likely not the best place to look for that type of property, but each potential home/condo buyer needs to make their own determination based upon the most recent available information on the specific property they are considering.

If your goal is to buy a property here in the North Lake Tahoe – Truckee area and cover some expenses because you are looking to make a life-style investment here in the area, you’ll have a good idea on how our vacation rental numbers are working, and what to expect in the buying process!

Vacation Rental Income for North Lake Tahoe – Estimates, what every potential buyer should know before they buy – the pros and cons!

If you have questions, or want more information on buying here in the North Lake Tahoe and Truckee area, call me, I can help you too!

One last disclosure – I am not an accountant, CPA, Vacation Rental Manager, and I do not run, or operate a vacation rental company in the area. The information provided is for general information purposes only, and is subject to change, and/or correction without notice. Buyers should always do their own investigations as each property is unique and may present a different opportunity.

Search the North Lake Tahoe – Truckee area for homes and condos here by using the map search:

Thinking about making Lake Tahoe, California your second home? Check out the homes that are for sale here:

Want to see what condos are for sale in Lake Tahoe? Here are the current listings:

For all of your Tahoe real estate needs –

Laura A. Allen | 530.414.1260 | Laura@TahoeLaura.com
BROKER ASSOCIATE, Tahoe Real Estate Agent
CalRE# 01473598
Coldwell Banker, Tahoe City – Truckee, CA

All information is deemed reliable, but is subject to change, and/or correction without notice.

Vacation Rental Income for North Lake Tahoe – Estimates

How much will property taxes be on my Tahoe Second Home?

April 26, 2016 By Laura Allen, Broker Associate, Tahoe Real Estate Agent, CA RE 01473598 | 530-414-1260

How much will property taxes be on my Tahoe Second Home?

Working with second home Tahoe Buyers I get a number of questions from them. One of the most common questions I am asked is:

“How much will property taxes be on my Tahoe Second Home?”

While I am not an accountant, or tax professional (full disclosure here), for general planning and budgeting purposes, in the greater Tahoe City – Truckee, California areas (Placer County, Nevada County and El Dorado County), a buyer can generally expect their first year of property taxes to be approximately 1.25% of the purchase price.

Some agents go a little higher, some a little lower, but I have found that for planning purposes, using 1.25% of the initial purchase price is a reasonable number for our area for your first year. The tax breakdown is as follows:

1% of the real estate purchase price (California Proposition 13)

Add an additional 0.25% for additional tax payer approved measures such as education, fire, and other local public programs, for a total of 1.25% of the purchase price.

How much will property taxes be on my Tahoe Second Home?

A Tahoe Real Estate Example:

Purchase price of the Tahoe cabin is $500,000

Property taxes for the first year should be about $6,250, or 1.25% of $500,000 as an estimate.

California Prop 13 does allow for the underlying property value to be increased by 2% each year. What that means to you as a new Tahoe home owner is after your first year, and every year thereafter, a Tahoe property owner could see the base value of the property increase, which means the total tax bill will also increase for the following years of ownership.

For example, with our $500,000 Tahoe property purchase example, after year one, the second year of ownership could become $510,000 (2% increase in the base value of $500,000).

That means the property tax bill would also increase as 1.25% of $510,000, would be $6,375, which would be an increase in total property taxes due.

The following years could follow a similar formula. An increase in the property tax over the first year due to the escalation property value clause is also something a California Tahoe Buyer should plan for.

Supplemental Tax Bill If the Tahoe real estate you are buying currently has a lower tax basis than the purchase price you are paying, you’ll get a “supplemental tax bill” about 90 days after you have closed escrow. So be prepared for that extra bill and payment. Again, another expense that you should plan for in that first year of ownership, which goes into figuring out “How much will property taxes be on my Tahoe Second Home?”

If you are buying a property that has a higher tax base than what you are paying, you’ll receive a tax notice that gives you have a tax credit, and they will apply that towards your next tax bill.

If a buyer needs an exact property tax amount for the Tahoe real estate they are purchasing, or if they need tax planning advice, I always recommend speaking to a tax professional.

Want to know more about what your Tahoe Real Estate Property Taxes are funding? Here is an example of a detailed breakdown of some of the additional local area taxes that make up that extra 0.25% for the West Shore, Placer County (Tahoe City and Homewood, a small portion of Tahoma) areas:

Tahoe Forest Hospital B&I 2008 Series
Tahoe Trukcee Un B&I 99a Sfid#2 Ref
No Tahoe Fire Special Tax
Tahoe Truckee Unified School Measure A
Tahoe Truckee Un B&I 93a98 Ref 2010
Sierra College Sfid #1 B&I 2004 S
Tahoe Truckee Un B&I 99b Sfid #2
North Tahoe Fire Suppression Asmt
Tahoe Truckee Un B&I 93b Ref 2004
Tahoe Truckee Un B&I 99a S fid #2
Placer County Mosquito & Vector Contr
Tahoe Trukcee Un B&I 2002a Sfid #2

Yes I know there are a lot of abbreviations that don’t make a lot of sense, and it seems that the same item reappears several times, but this is a current breakdown from a recent purchase in the Homewood area on the West Shore of Lake Tahoe in unincorporated Placer County.

There are other taxes that are unique in El Dorado County for the Tahoma (most of Tahoma, all of Meeks Bay and Rubicon Bay are all in El Dorado County) area.

Properties in Kings Beach, Tahoe Vista, and Carnelian Bay have a Mellos Roos fee for the North Lake Tahoe Conference Center.

Truckee is mostly in Nevada county, but you’ll find Northstar, Martis Camp, Lahontan and Schaffer’s Mill all in unincorporated Placer County. you’ll find that those properties have their own unique assessments, along with the ones above. Buyers should always ask if there are special Mellos Roos fees, and/or private transfer fees on the sale of property in the specific community they are looking to buy.

During your escrow period you will have a chance as a Tahoe Buyer to learn more about the specific taxes that will come along with your Tahoe property. For planning purposes using 1.25% of your purchase price is going to give you a good idea of what your annual tax bill amount is going to be on that property.

Need help buying a Tahoe property? Give me a call!

Lake Tahoe, California Real Estate property taxes.

Thinking about making Lake Tahoe, California your second home? Check out the homes that are for sale here:

Want to see what condos are for sale in Lake Tahoe? Here are the current listings:

For all of your Tahoe real estate needs –

Laura A. Allen | 530.414.1260 | Laura@TahoeLaura.com
BROKER ASSOCIATE, Tahoe Real Estate Agent
CalRE# 01473598
Coldwell Banker, Tahoe City, CA CalRE#01908304

All information is deemed reliable, but is subject to change, and/or correction without notice.

How much will property taxes be on my Tahoe Second Home?

What is a BMP Certificate in Lake Tahoe?

April 19, 2016 By Laura Allen, Broker Associate, Tahoe Real Estate Agent, CA RE 01473598 | 530-414-1260

What is a BMP Certificate in Lake Tahoe?

A common question I get as a Tahoe REALTOR® is What is a BMP Certificate in Lake Tahoe?, and why do I need one? Followed by any one of the following questions:

What is a BMP Certificate in Lake Tahoe?
Does this property have a BMP (Best Management Practices) certificate?
Can I tell from a MLS listing if a property has a BMP Certificate?
Is having a BMP Certificate a point of sale requirement?
What will it cost to get a BMP Certificate on a Lake Tahoe Basin property?
Who issues the BMP Certificate?
How long does it take to get a BMP Certificate once the work has been done? When can my BMP property work be done?
If the deadline has passed, why does this Seller not have a BMP Certificate?
Can I get in trouble for not having a BMP Certificate?

When I am showing Lake Tahoe basin properties, I always point out properties that do have a BMP certificate and those properties that most likely do not have a BMP Certificate. Our buyers are sophisticated and they always have good questions about the BMP topic that every Lake Tahoe Basin home Buyer and Seller needs to be aware of, ask about and understand.

So let’s start with the basics – What is a BMP Certificate in Lake Tahoe?

BMP stands for Best Management Practices and it is a land/building retrofit program that has been set-up by the bi-state (California and Nevada) agency known as the Tahoe Regional Planning Agency (TRPA).

The TRPA is an agency that leads the environmental effort for both California and Nevada in the Lake Tahoe Basin. That means that the TRPA is involved in what is built-in the area, where it is built, the size of what is built, along with the areas of development.

The TRPA is the agency that provides the balance to building and development in the Lake Tahoe Basin area, along with preserving, restoring, and enhancing the relationship between man, urban areas, and nature.

BMP property certification, which is required to be in place on all properties in the Tahoe Basin (California and Nevada) per TRPA Code of Ordinances Subsection 60.4.6.A, is an environmental retrofit program that is designed to improve the water quality in Lake Tahoe by addressing how water runs off of all developed properties. The BMP retrofit program is an Environmental Improvement Program (EIP).

How does it work? Summary: In a nutshell, the BMP Certificate program is designed to address how the water (snow/rain/water from your property) is handled once it sheds off your hard surfaces with the goal of getting as much of it back into the ground rather than having it run down the street collecting oil, toxins, and other nasty items and then ending up back in Lake Tahoe.

The BMP program is designed to address how the hard surfaces on a property like your roof, decks, patios, sidewalks, and driveway/parking area move storm water back into the earth.

Once that water hits the ground, the goal is to have it go directly into the ground by the use of roof drip lines (sometimes called French rock drains), driveway drains (channel drains) into drywells, and then by using selected vegetation and/or ground coverage on hard, uncovered ground surfaces, water can be captured on the property and moved into the earth/dirt, which can then act as a natural filtration system (think about how water moves through a filter to clean the water) removing the environmental toxins/foreign materials out of the water, which will eventually end up in Lake Tahoe.

Does this property have a BMP (Best Management Practices) certificate? As a Tahoe home buyer you’ll ask your real estate agent does this property have a BMP certificate? To answer that question either you, or your agent can go to the TRPA BMP website and search by the County Assessor Parcel Number (APN) to confirm the actual BMP certificate status, and we can also call to confirm that status.

When we are looking at properties, looking up APN#’s may not be practical while we are at a property, so we can also take an educated guess on whether a property has done their BMP work by looking for the following items on a property:

Physical signs that a property may have done their BMP work, are working on getting their certificate, or have a current BMP certificate:

A rock/gravel drip line where the water will come off a roof.

Rock/gravel under and around a deck area.

A driveway drain is also sign that BMP work has been done on a Lake Tahoe property.

Just as a FYI, properties that completed their BMP work when the BMP program was first implemented back in the late early 2000’s may not have a driveway drain, but may have a dip, or bump to move water to the side of the driveway.

Originally property owners had some options to either build a pavement/asphalt hump into the driveway to channel water, or they could cut and put in a driveway drain in to direct water into a drywell by the side of the driveway. A driveway drain is not always a tell-tale sign of not having a BMP certificate, but some type of driveway work it’s a good sign that BMP work may have been done, or at least started.

Can I tell from an MLS listing if a property has a BMP Certificate? No. Unfortunately at this time the Tahoe Sierra Multiple Listing Service (TSMLS) does not require, or have an input data field for this information for Lake Tahoe Homes for Sale, but I do think it’s a great idea.

Currently, the only way to find out if a property has a BMP certificate will be to either look it up on the TRPA website, or call the TRPA to get this information. Your Tahoe REALTOR® can help you get this information and is a great reason to use a local real estate agent to help you buy, or sell in the area!

Buyer Tip: The only way to know for sure is to verify the BMP property status with the TRPA BMP website, or call and confirm the information. Even if a property is showing that is has a property certificate, as your broker we recommend that all buyers investigate, confirm information, and satisfy themselves that the information they have received is current and accurate.

Is having a BMP Certificate a point of sale requirement? At this time (2016), having a current, and in good standing BMP Certificate is not a point of sale requirement. Property owners and Tahoe home buyers should be aware that there was an effort to make having a BMP Certificate a point of sale requirement as recently as the fall of 2014, however, the topic was tabled, and in my opinion will be raised again in a couple of years, if not sooner.

Tahoe Home Buyer Tip: You should always ask if a property has a BMP certificate for single family, multi-unit, and commercial properties for a property you are considering making an offer on.

Tahoe Condo Buyer Tip: If you are buying into a condominium/townhouse development, the Home Owners Association (HOA) will be responsible for getting the entire complex BMP certified, along with the individual units. It’s a good idea to ask if the individual unit has a BMP Certificate. If it doesn’t, ask is if the HOA is working on getting into compliance, and will there be a special cost assessment to do that work.

What will it cost to get a BMP Certificate on a Lake Tahoe Basin property? That depends on the property. While I am not a BMP cost estimator, and my recommendation to my buyers is to get a price quote from a reliable, local BMP Company so you’ll know what the expected cost is for the property they are looking to buy.

In general, based upon the BMP cost quotes that I reviewed for clients during 2015, on average, the BMP price work quotes were running at least $4,000+ to do the work on a relatively level lot, with a driveway that was 2 cars wide, but costs can vary so it does pay to shop around.

Properties with unpaved driveways, or unpaved allowable parking pads, will start with a price tag of $7,500+, or more depending on how big of an area will need to be paved, which is the big-ticket item in doing the BMP work.

One of the biggest single cost items on the BMP work estimates these days is coming from the cost to either pave the driveway, or to install the driveway drain(s), which seems to be running at a cost of at least $2,000 per driveway drain. Driveways that are larger, or circular will be more expensive.

A few items that can add and increase the cost to complete a property BMP Certificate work:

If the home is a lakefront, waterfront, or riverfront property
If the property has an environmentally sensitive zone (wetlands, seasonal stream, or drainage area)
If the lot is steep up and/or down
Large areas of uncovered dirt with signs of past run-offs
Unpaved driveway and/or parking pad area (a BMP retrofit application will need to be used) as the cost of paving those areas will be an additional cost for the property owner.

Tahoe Buyer and Seller Tip: Buyers and sellers can negotiate as to who shall pay for BMP work. As a Tahoe seller you’ll help yourself by getting a BMP cost estimate from a local BMP company that will guarantee to get a BMP Certificate for your property if they do the work.

It typically takes several months to complete the process, so holding up a sale to get your final certificate is not a position you want to be in, so know what your options are as seller, before that buyer makes an offer on your property.

As a buyer if the seller does not have a price quote for that work, and in the negotiation process has countered you and will not pay for BMP work, as a buyer, you’ll want to get a cost quote while you are in escrow so you’ll have a good idea as to what it will take to get the property into a complaint status.

What is my Lake Tahoe Home Worth? Free Market Analysis Here!

Who issues the BMP Certificate?

The Tahoe Regional Planning Agency (TRPA) will issue the certificate of completion upon a site inspection to verify that the property is now compliant and has met the necessary requirements.

How long does it take to get a BMP Certificate once the work has been done?

This past summer (2015) the wait to get a site verification appointment was running 6-8 weeks from the time the request was made for the review. As a general rule of thumb, it typically only takes a few days to do the BMP certificate work, however, it most likely will take 3-4 months from start to finish once the work begins on your property to complete the BMP certification process using a professional BMP company in the area and then having the TRPA sign off on that work and then issue the certificate for the property.

Remember this is a seasonal activity (late April early May through early November, or until the ground freezes). Local BMP Companies get booked-up quickly, so there most likely will be a wait to get into their work schedule the later in the season you schedule your work.

When can my BMP property work be done?

BMP work will most likely need to be done between May 1 – October 15, as that is when grading, and the movement of more than 7 cubic square feet of soil can be moved, but it may be able to be done as early as April and as late as November/December depending on what needs to be done and the time of year when the ground will be unfrozen and the work can be easily done.

Tahoe Buyer Tip: Asking a seller to complete and get their BMP Certificate after October 15 and before May 1, or during your escrow (sales period) at any time of year is most likely not going to happen for the following four reasons:

1) There are strict restrictions on how much soil can be moved, and grading is not allowed during the time period (no paving of driveways/parking pads)
2) Frozen ground can make the physical work very difficult.
3) Snow coverage on the ground can prevent the TRPA from completing their site inspection – no site inspection, no certificate.
4) The time to do the work, and get the completed sign-off is most likely going to take at least 3-4 months, much longer than the typical escrow (sales) period, not to mention interest rate loan lock periods.

A better solution is to negotiate with the seller for them give you a financial credit based the cost estimate provided by a local BMP Company so that you can do the work during the right time of year, or make sure your purchase price reflects the BMP work that you will need to do after the sale closes.

If the deadline has passed, why does this Seller not have a BMP Certificate? Unfortunately I don’t have an answer for this one. The original deadlines to complete the BMP work on properties around Lake Tahoe were staggered, and each zone had a different year deadline. My guess is that property owners just didn’t pay attention to the announcements and the deadlines came and went. Today, it has become a negotiation point and a disclosure item between buyers and sellers.

Can I get in trouble for not having a BMP Certificate? The answer is yes, and no. Most property owners that have not completed their BMP work have not been fined, or had a problem, but that can always change and most likely will as the demand to get all properties into compliance increases. The BMP program can generate a daily fine of up to $5,000 per day for a non-compliant, problem property.

As a Tahoe buyer you’ll have questions and concerns on how to get your property BMP certificate, but with the help of a local BMP Company that specializes in getting Lake Tahoe Basin properties into compliance, you’ll get the on-site physical assistance and local knowledge you need to help you through the entire process.

Protecting Lake Tahoe through the BMP Certification process!

For more information on the TRPA BMP program, check out their website at: www.TahoeBMP.org The cost and requirements to complete and get a property BMP certificate are always being updated. This information is meant to be informative, and is subject to change and/or correction with out notice.

If you have more questions, or would like help in buying or selling, give me a call at 530.414.1260 and I can help you through the entire home buying and selling process.

Thinking about making Lake Tahoe, California your second home? Check out the homes that are for sale here:

Want to see what condos are for sale in Lake Tahoe? Here are the current listings:

For all of your Tahoe real estate needs –

Laura A. Allen | 530.414.1260 | Laura@TahoeLaura.com
BROKER ASSOCIATE, Tahoe Real Estate Agent
CalRE# 01473598
Coldwell Banker, Tahoe City, CA CalRE#01908304

All information is deemed reliable, but is subject to change, and/or correction without notice.

What is a BMP Certificate in Lake Tahoe?