Truckee and North Tahoe - Are Condos Undervalued?
Currently, there are only three homes in Truckee listed for sale under $400,000, four homes in North Lake Tahoe and no Tahoe City homes. Almost all of the North Tahoe Truckee homes under $450,000 require some remodeling. Home prices have increased 8% over the last year. In comparison, there are 12 North Tahoe and 18 Truckee condos listed below $400,000 and prices have not appreciated since last year.
While owning Truckee or North Tahoe condo, you are paying a fraction of the cost for snow removal, exterior staining, home maintenance, landscaping and more. Another benefit is having a condominium management company keeping an eye on the property. Best of all, many of the condos on the market have been updated with granite counters and stainless steel kitchens.
With interest rates staying low, are condos a good income property alternative? Currently, the Truckee and North Tahoe rental market is very tight and two bedroom, two bath condos rent out for $1800 a month on a one-year lease. If one pays $325,000 cash for a condo and your total expenses including association dues, taxes, etc is $750 a month, your net is $12,600 a year. This equates to a 3.9% return on investment and if one adds future rent increases, depreciation allowances and possible increase in valuations, Truckee and Tahoe condo ownership is an investment option. Keep in mind that short-term rentals end up ‘penciling out’ about the same gross income. If one owns a condo in Northstar or Squaw Valley, the numbers improve for short term rentals, along with property valuations.
First-time homeowner or Second Home Option?
It’s still a buyer’s market for many condos and if one is considering purchasing a home in the under $250,000-$395,000 price range, it’s in your best interest to figure out your numbers with a home purchase versus a condo. How much do you want to spend per month on loan payments, taxes, repairs, renovations, etc.
Contact us at earthandskyproperty.com and we will help you with comparisons between a home or condo and what the rental income potentials may be.