SOME LAS VEGAS HOMEOWNERS MAKE VACATION HOMES FEASIBLE
In Las Vegas real estate, there are happy words (“sold!”) and there are troubling words (“default”). Because of the associations they conjure up, some phrases just automatically make us happier. Two of the leaders in the positive category are the magical words, ‘vacation home.’ All by themselves, they can trigger a smile. Why not? “Home” is comforting; “vacation”is fun. Put them together in “vacation home” and you’ve got a double positive. It’s a real estate equivalent of Jimmy Buffett’s Cheeseburger in Paradise. As the economy recovers, some American families are doing more than just smiling at the idea. The Wall Street Journal says that vacation home sales jumped more than 50% in 2014—up from 717,000 the year before. Quicken Loans reports a jump “in both the number and dollar volume of second home mortgage applications.” To a Las Vegas homeowner with sufficient wherewithal, there are some practical, real-life incentives for moving the idea from daydream to the ‘to do’ list. The primary motivation is what comes first to mind. Just as a vacation is a welcome respite from the day-to-day, a vacation home needs to qualify as a destination that is pleasurable in itself. Where that could be differs for everyone, but whether it be the beach, desert, mountain, lake, cultural metropolis or outdoor sporting mecca, any Las Vegas homeowner’s vacation home should be a haven inherently suited to relieving the stress of the workaday world. Although it would seem to be properly classified as a pure luxury expense, vacation homes can be more financially sensible than that. The Kiplinger web site has a number of observations for vacation home buyers. It finds that some mortgage interest rates on second homes have lowered to first-home rates. Another alternative is the “favorite source” for all-cash purchases: a home equity line of credit. According to Kiplinger, “Mortgage interest on a second home is deductible on as much a $1 million in principal for both homes combined.” If lenders calculate eligibility via the Fannie Mae and Freddie Mac guidelines, a borrower’s total debt payments should not exceed 36% of gross income…but if the second home is to be rented, that income can be part of the calculation. Which brings up some other possibilities. A vacation home can not only cut down on vacation expenses (hotel and restaurant prices are rising, after all); if rented out some of the time, it can contribute offsets to its cost. To take advantage of IRS rules regarding personal versus rental classification, you should consult a tax, expert. Since a quarter of vacation homes are rented out at least some of the year, it’s a tactic that deserves investigation. Perhaps the advantage that’s talked about most for second home buyers is the contribution it can make toward retirement. If a retiree ultimately converts a vacation home to the principal residence, profits from the former home can make a handsome contribution to the retirement nest egg. And if, by retirement time that vacation home has been paid for in whole, it can make for an even more pleasing financial picture. For a Las Vegas resident with sufficient resources, purchasing a vacation home can be a practical as well as emotionally sustaining venture. If it sounds like an idea worth investigating further, talk it over with your financial advisor—and I’ll be standing by to help with any and all real estate considerations!
WHEN HOUSE HUNTING BY ZIP CODE ASSUME NOTHING
If you ask anyone doing serious house hunting in Las Vegas how they are going about it, there are few who won’t point to the web (nationally, 88% use it) as at least one of the top two most useful tools (their Las Vegas REALTOR® is the other one: 87%). Yes, yard signs are helpful, and its first cousin, the Open House, is another (they’re related since it’s hard to imagine an Open House without a yard sign or two). Both come into the house hunting picture a little less than half the time, according to NAR® statistics. A quarter of house-hunting expeditions also rely on one or more online video sites, but I think that’s just because online listings frequently link to those to display virtual tours. To a prospective buyer, it may not even be evident that a different site has been used. In fact, who cares? What is important—and what shoppers who are actively embarked on a Las Vegas house hunting foray do care about—is what is the best way to find the Las Vegas homes for sale that best fit their requirements. Along with size and price guidelines, usually location turns out to be a leading specification—sometimes the leading spec. Most of the online search tools let you enter a location in a form that allows “city, state, neighborhood, or zip code.” Sometimes, “county” is allowed. Especially for anyone planning to move to a Las Vegas that is largely unfamiliar, it’s here that assumptions can be misleading. Of course, house hunting using a sizeable “City” is likely to deliver unwieldy results. If you entered “Los Angeles,” for instance, the difference between a nice little parcel on Mount Lukens (elevation 5,000+ feet) and one by Point Dume (elevation zero) makes such an entry all but useless. “Neighborhood” will usually yield much more meaningful results—but only for those who are already familiar with the Las Vegas. This is where entering a “Zip Code” might seem to be the most likely way to get the house hunting results you’re looking for. Sometimes it might. Yet a word of caution is in order—this is where a little practical zip code knowledge could come in handy. A zip isn’t always as cozy a Las Vegas as you might think. For instance: • Las Vegas and cities sport different zip code “overlays.” More than one Las Vegas name may be in a single zip (but that zip might not cover the entirety of any of them). • Many zips can share the same Las Vegas name (for instance, Austin has 78). • If commute time and/or fuel economy are an issue, entering 89049 (Tonopah, NV) might not be helpful. It covers 10,000 square miles, which makes it slightly larger than Maryland. • On the other hand, some zips cover just one building. But if you do decide to use the zip code to specify a search Las Vegas, steer clear of “48222.” It’s the one that delivers mail to passing ships. Also, if you’re interested in Centralia PA, don’t bother looking for its zip; just enter ‘Centralia.’ (It’s the only Las Vegas that has no zip code). No matter what online search method you use, when the house hunting destination is in the Las Vegas vicinity, there won’t be any more foolproof way to locate the home you’re looking for than to give me a call. I’ll put together a list that takes all your specifications into account…after which we can set out for a real-life, non-virtual tour!
COST OF LIVING HERE IN LAS VEGAS IS DOWNRIGHT ATTRACTIVE
Being able to work within a realistic family budget has become an increasingly important part of modern living for many Las Vegas residents. Our Las Vegas’s cost of living may not have been exploding —but most people are keeping an eye on it anyway. The lingering effects of the last decade’s financial dislocations—combined with the slow-motion recovery from the Great Recession—have made monitoring expenses a practical necessity. The wolf doesn’t actually have to be at the door for that more cautious attitude to have developed. Consumer optimism may be on the rise, but it’s a pretty gentle incline. In any case, it does seem that spending on frivolous knickknacks is becoming a rarer diversion. Into that general climate comes last week’s news item. It’s one that could bring some of the more frugal Las Vegas residents a slight degree of comfort, in that it has to do with the exorbitant cost of living in places other than our Las Vegas. The news comes by way of global financial services giant UBS—the Swiss multinational which is the largest wealth management firm anywhere, period. It’s also an outfit that is not well known for its modesty: the UBS website’s “About Us” tab points to themselves as being the Best Bank in Switzerland and the Best Global Bank, in that order. BloombergBusiness quotes them as having announced the statistics for the cost of living in cities across the globe. They emerged with the finding that there are three cities that are clearly at the head of the pack. No one in Las Vegas could be too surprised that two of them are in Switzerland (Zurich and Geneva). The two are said to “top the list of the world’s most costly cities.” Back in January, the Swiss central bank scrapped its currency ceiling, which has since caused its currency, the franc, to leapfrog to record heights against the Euro (and, we are left to assume, the dollar—and all the others). In a horizontal bar chart “based on the cost of a basket of 122 goods and services” that accompanies the article, we find that Zurich is the most expensive place on Earth, closely followed by Geneva and the third city. But further reading reveals that this presentation is highly suspect. It must be some kind of Swiss pride in being a really really expensive place to live, since City Number Three turns out to be an even more really really expensive place—if you take rent into account! And why wouldn’t you take rent into account? And the third city is not even in Switzerland!! It’s right here in the good old U.S. of A! Where else but …The Big Apple! San Franciscans have a legitimate beef with their verdict, but they’d have to take it up with UBS (who apparently doesn’t get out to the West Coast often). All they know is that a two-bedroom apartment in NYC averages $4,320 a month—compared with a paltry $2,390 in Zurich. The basket of goods and services (it runs to about $3,500 per month in each of the three cities) gets drowned by that Manhattan rent tsunami. It’s almost enough to make any Las Vegas resident feel much better about our Las Vegas cost of living—and our Las Vegasreal estate bargains, too, of course. Call me for more about those!
Categories
Recent Posts
