My husband and I have always loved coming to Santa Fe and wonder if a second home there would be a solid investment..

Asked by Secondtimearound, Cincinnati, OH Fri May 4, 2012

We are not moving permanently, but would like to spend some time there while renting out the rest of the time. Any suggestions on location and types of housing welcom.

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Spence Ralston’s answer
Spence Ralst…, Agent, Santa Fe, NM
Wed Jun 13, 2012
Sorry to have to correct you Ardvark, but - in fact - the inventory is down significantly. Here are the actual numbers for residential property for sale in Santa Fe County for each of the past 3 months:
2011 2012

March 1592 1340
April 1652 1366
May 1710 1404

This reduction in inventory is similar when we just look within the city itself:
Comparing the same three month period, in March 2011 the number for sale was 824. This March: 689.
In April it was 849 in 2011; this year it was 685. And for May it's 706 this year vs. 874 for last year.

Now I'll try to correct other misinformation:
Days on Market: in May of 2011 it was 217; in May of 2012 it was 184
Average Price per Square Foot: in May of 2011 it was $200; in May of 2012 it was also $200.
These figures will fluctuate from month to month. If we look at the comparison for the past 15 months, then we'd see that the average price per sf sold was down 12.5%, and the days on market was down 15.4%.

Another factor to consider is the interest rate on a mortgage. Rates are at their historic lows right now. For every 1% increase in mortgage rates, the affordability goes down by 10.75%. In other words, someone who could qualify for a $300K house at 4% interest, would only qualify for a $270K house if the rates went to 5%.

I'm not sure where you're getting your information from, but it's important for you and other readers of this forum to have up-to-date and correct data so you and they can make decisions based on facts, and not hearsay. And without being negative towards Zillow or Trulia, the best source of current, correct information is a good Realtor.
Your advice to use an accountant or tax attorney to evaluate costs and benefits is good advice, especially when one wants to know the tax advantages of a property purpose for their unique circumstances. Still, there's no reason why a Realtor's estimate can't be useful as strictly an estimate of monthly costs.
1 vote
Ardvark, , Santa Fe County, NM
Tue Jun 12, 2012
Be very careful before making such a move. The city and local residents actively attempt to prevent or limit such rentals. It's a contentious issue in Santa Fe, as people don't want random renters in their neighborhoods . A google search will give you an idea of just how many of these rentals are already out there.

There is also a HUGE glut of inventory, and prices in town are surprisingly high compared to income levels. Prices are falling and a lot of properties have been sitting on the market for years. Couple that with an excess of available rentals due to people not being able to sell their houses and you will be competing with a lot of others for renters.

Check out Zillow and this site to see just how many houses are for sale. It's much higher than I've ever seen it in the 15 years I've lived here. Then have a look at craigslist to see the massive number of rentals. Also consider that wages in Santa Fe tend to be very low, thus renting the house out to cover the mortgage is not likely.

I'm sitting on cash to buy house and every time I look, then run through a spreadsheet, I wind up passing. Don't ever let a real estate agent do your financial estimations for you, they work for the buyer, not you. Use an accountant or tax professional if needed. There are many expenses and tax consequences, especially with a rental property.
2 votes
Valerie Hass…, , Santa Fe, NM
Wed May 22, 2013
Hi There. I am a leasing agent and could help you rent out your home if you decide to buy one...but let me be honest. Do the math. My experience is that every year you can come and enjoy a month or two in Santa Fe in a lovely vacation rental (weekly), bed and breakfast (nightly) or short term rental (1 mo min) for about what your annual property taxes will run you if you purchase. Off season rates are very reasonable. Review your motivation for being in Santa Fe and why you would want to buy vs. rent. Keep in mind that buying a home changes the experience from relaxation to maintenance, concern, liability and expense. I have handled luxury residential leasing in resort towns for many years and it never truly pencils out. The costs involved in buying and selling over ride the investment principles. And the truth is that these units almost always cost more to manage and maintain than people anticipate. There are many many gorgeous homes to rent that are owned by those who did what you are talking about. You can typically select one you love and book it annually - reserving a "known and comfortable entity" without all the other responsibilities/costs.
Please see my website - finding a home to love page and you can enjoy links directly to several esteemed companies who offer turnkey furnished luxury and casual homes. 2nd Homes are not typically good "investments" as they join personal use, sporadic income/occupancy, high management costs and ongoing expense. In normal markets the average 3% annual appreciation does not pencil. They are like any other luxury item ie; boats, horses and cars. Great for the brokers and the happiest day is the day you buy it - and the day you sell it. That is just the truth...even if I have been in this business for 30 years. You need to know it.
0 votes
Nancy Lewis, Agent, Santa Fe, NM
Mon May 6, 2013
Absolutely, a second home in Santa Fe is an excellent investment. In some subdivisions like Aldea and Las Campanas, many homes are second or third homes. Our rental market is very healthy and we have solid and reliable rental companies that can help you with your rental. Start with a realtor and they can take you through the process.
0 votes
Drew Myers, Agent, Abiquiu, NM
Mon Jul 9, 2012
Yes, my parents are in the same situation. They live in a very hot climate and would like to spend 4 months here a year. Their are many great and inexpensive condo options that are great for seasonal use. Some are REALLY cheap.
I can show you how to get in a good area and possibly even rent the unit when you are gone.
Barker Realty is the locals choice.
Sincerely,
Drew Myers
Barker 505 692 0206
0 votes
Emily Medvec, Agent, Santa Fe, NM
Sun May 13, 2012
Dear SecondTimeAround -

Santa Fe is a destination market and consequently there are many people like you who want a second home as an investment for your enjoyment as well as source of rental income.

Santa Fe does have a Short Term Rental Ordinance which is important when considering location as well as when you want to rent vs enjoy your property.

What I suggest is you have a consultation with both a local Realtor experienced in Second Home properties and your tax advisor. There are a lot of reasons why people buy second homes in Santa Fe and in my experience rarely are they the same. If I can be of assistance for further information, do not hesitate to contact me directly.

Emily Medvec, CRS, RSPS (Resort & Second Home Property Specialist)
Santa Fe Properties
Google Voice 505-216-6280
Cell/Text 505-660-4541
0 votes
Brian Blount, Agent, Santa Fe, NM
Sat May 5, 2012
It sounds like you need to buy a property you could rent out on a short term basis. Then you could be flexible about the times you block to be here. You will need a short term rental permit, a good property management company and you MUST be very particular about location. For the most part, people who need a furnished rental want to be in the middle of town, walking distance to the Plaza, farmer's market, Canyon Rd, etc. This means you should come out, see everything on the market in these areas and, if nothing works, be prepared to come out quickly when you are notified that a very suitable property is on the market. I send a video of these properties to my clients who are in your situation. If they can use Skype or FaceTime I can do a live streaming video. Also lots of information and photos are helpful. You don't want to fly out unless you are pretty sure that the house is for you.
Please call if I can help.

Brian Blount, CRS
Senior Associate Broker
Keller Williams Realty
314 S Guadalupe
Santa Fe, NM 87501
505-670-5002
Web Reference:  http://SantaFeAndMore.com
0 votes
Rick Green, Agent, Cerrillos, NM
Fri May 4, 2012
Hello,

There are many great locations. I believe two of the best locations for a part time rental would be close the Rail Yard and some pockets around Canyon Road. These are nice areas to pleasantly walk to local entertainment. The best type of home perhaps would be one with low maintenance and some Santa Fe charm. Discuss your situation with a Realtor and ask to receive email links to some active listings and some recent solds. It is good to have a conversation about the current Santa Fe Real Estate Market and your goals.
Feel free to call with any questions,

Rick Green
Santa Fe Properties
1000 Paseo de Peralta
Santa Fe, NM 87501
505 470 5422
0 votes
Spence Ralst…, Agent, Santa Fe, NM
Fri May 4, 2012
Oh my, that's a dangerous question to ask a Realtor. ;o)
But the truth is that there may not be a better time to buy that Santa Fe investment/second home property than now. This is based on fact, and is not hyperbole.
Properties are priced at their lowest in years (assuming they are priced realistically for today's market) and mortgage rates are at historical lows. House inventories here in Santa Fe have dropped (depending on area) up to 25% compared to last year, and are just now beginning to rise. Buyers appear to be out in greater numbers as seen by healthy increases in the number of homes sold and under contract compared to the first quarter of last year. What a great time to be a qualified buyer!
As for location and type of housing the answer is, as always, it depends. In order for me to assist you in making the decision I'd need to know more specifics, then I'd prepare a net-out sheet for you so we could determine the best investment potential. But of course a home purchase is more than just an investment; it's a place you yourselves have to like - where you'll live part-time, where you'll entertain friends, etc.
I've helped many with similar goals as yours, and if I can help you please contact me.
Web Reference:  http://SpenceRalston.com
0 votes
Leigh-Jo Anz…, Agent, Albuquerque, NM
Fri May 4, 2012
Hello,

You're considering it at a perfect time. There are some amazing deals in Santa Fe and a range of neighborhoods to choose from.

What are you looking for in a community?

Leigh-Jo
Syan Real Estate
Call/Text: (505) 730-8181
Web Reference:  http://www.Syan.com
0 votes
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