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Thanks much Debbie....I'd just like to live somewhere there are actually seasons - not just HOT and not so hot...LOL. Btw,
I was born and raised in OK also...Tulsa area. Hope we can both get out there soon. We are meeting with a realtor in early Dec.
I agree with you. Hot is not my thing.
It all depends if this ranch sells than a nice place near the plaza but otherwise a second home like ft. Macy. My husband loves the area going up to the bird sanctuary. Not those multi million ones in the hills but the ones on the actual road going up.
debbie - fyi the closest home to the Randall Davey Audubon Bird Sanctuary is listed for sale at $699,000. It's across the Santa Fe River in the Cerro Gordo neighborhood - about 9/10 of a mile door-to-door.
That 1 bdrm condo that is bringing in $30,000 a year in rental income would have to rent for $2,500 a mo to do that. Are the rents there that high, or is this adjusted for a snowbird season rental adjustment? That just seems to be an amazing amount of money to pay for a small Santa Fe condo, which after all, is simply an apartment.
Unless you are paying cash and not carrying a mortgage, actually turning a profit on condo renting is often problematic. You have to pay taxes on any profit, condo fees, property taxes, maintenance, repairs, a rental agent if you don't live in the area, extra insurance, etc. If it goes unrented for a period it can really cut into the income picture too.
Best way to look at it is you would probably cover all the expenses. My experience is that a high end condo can make a good profit, but normally you are just looking at using a condo for someone's eventual retirement into it, or betting that it will appreciate and be worth more later than you paid for it now. I would be leery of the latter proposition. If the economy takes a downturn (this election and it's results for instance) and the housing market softens, selling can be a problem too. I would look for something that was in a really good area and hopefully had reasonable condo fees to give some security to ownership.
I am seeing lots of condos for rent on craigslist in Santa Fe for $800 and up. They look nice, although I have no idea about the neighborhoods. If it were me, and knowing what I know now about having money in a property and seeing the housing market go south, I would just rent until you build your home. The economic future of this country is just too unstable to have a lot of money tied up in a condo, which as I said is not even property, it's just an apt that you own. It's easy to forget what happened during the closing years of the Bush presidency, but it did happen, and that had quite an effect on everything and everyone living in this country. It could happen again.
To smarino - I agree with much of what you said, and would just add the following:
As for the rental market here for short-term rentals, $150/night (and up from there) plus taxes and cleaning fee would be pretty typical for a nice 1BR in close proximity to the Plaza. So that would mean just 20 nights per month gives a gross rent total of $3000/mo. Santa Fe doesn't have much of a "down season", and our busiest seasons could easily see closer to 30 nights per month rental income. The closer to the Plaza the higher the rents and least unoccupied nights.
An advantage you don't mention is the tax write-offs for investment property. I would suggest that anyone thinking of buying real estate for investment purposes (whether or not they intend to eventually use it for their own residence as a primary or second home) talk with their accountant and work the numbers to see if it makes financial sense. I have had several clients who bought condos and rent them out except for periods of the year when they want to come here for vacations and holidays.
They love having renters pay their mortgage and still have use of their property when they want.
Any investment has risk, whether it's gold, stocks or real estate. I look at real estate as part of my investment portfolio. As I tend to be a long-term investor I am not worried about short-term fluctuations in the market. I've never lost on real estate in the longer term. Santa Fe did experience a dip in prices during the 2008-11 period and some prices have not fully recovered yet, but prices have been rising steadily over the past year. Our home, which we bought at the high point in 2006 was appraised for 25% less in 2010. It was appraised 3 months ago for a higher price than what we paid for it (and no, I'm not selling!!!). I'd say that anyone afraid of short-term market fluctuations might want to stay away from real estate. However, if the historical trends for real estate appreciation hold true, I remain bullish.
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