Home Sweet Homes

“It’s a magnificent area. You can hike for hours and see just five other people,” says San Rafael resident Sandy Hanus about Bend, Oregon. “It has the same pluses as Marin in terms of outdoor recreation, but it’s much more affordable.” Hanus and her husband own a town house in Bend that they bought four years ago primarily as a vacation rental property. But because they love the amenities of the area, especially the golf and skiing at nearby Mt. Bachelor, they use it frequently as a getaway themselves.

They’re among the many Northern Californians who are reaping the benefits of second-home ownership, whether that means a vacation retreat, a source of rental income, a place to retire—or, as for the Hanus family, all three.

A National Association of Realtors survey released in April found that vacation home sales across the country rose to record levels in 2006 even as the overall real estate market cooled. Who’s buying? Overwhelmingly, married couples with a median age of 44 and an average household income of $102,200. Twenty-eight percent plan to move into the property full time when they retire.

It’s no surprise that recreation — beachcombing, fishing, golf, skiing—is such a big draw. David Hehman, CEO of EscapeHomes.com, which deals exclusively in vacation properties, finds that most Bay Area residents who use his service buy within a three- to five-hour drive from home—meaning in places like Mendocino, Monterey or Tahoe. But he says plenty of Northern Californians also like Oregon, Idaho, Arizona, and Palm Springs. “And many people are recognizing what a good value Mexico is,” Hehman adds. Buying farther away needn’t mean the property sits empty most of the time; a home in an appealing area can generate rental income when the owners aren’t using it.

Here’s a look at a few of those spots that are luring local second-home buyers, along with their insights into how to get the most out of a secondary property.

The Great Outdoors

Gene Buccola, of the Buccola Group real estate agency in central Oregon, says Bend attracts outdoor enthusiasts. “It’s a golf mecca,” he says. “It also offers fly-fishing, world-class rafting on the Deschutes River and nearby skiing.” Plus, it’s sunny—a rarity in Oregon—thanks to its location on the eastern side of the Cascades. And it has very good health care resources, something to think about, Buccola says, when you’re considering where to retire.

San Rafael’s Hanus is so enamored of Bend that she intends to make it her permanent home someday. An avid skier married to an avid golfer, she makes frequent visits to their town house. “Being able to vacation here in all four seasons has allowed us to really get to know the place,” she says. She likes the diversity of the people who live there, too. “It’s not like a retirement town. There are young families here too.” Bend is comparable in size to San Rafael, she points out, and has every amenity—including some great restaurants run by ex-California chefs.

At first, Hanus kept the property rented out to weekend vacationers, but found it hard to schedule time there for her own family. Then she switched to renting it out for long-term stays. “We rent to professional couples who are building a home in the area and need a place for a few months. That makes it easy for us to sneak in visits between rentals.”

Another recreation-packed magnet for Bay Area residents is Tahoe, with its magnificent lake, snowy slopes and forests full of hiking trails. “Ten years ago, 50 percent of owners were second-home owners. Now it’s 70 percent,” says Carl Fair, of Buckingham Lake Tahoe Properties in South Lake Tahoe. Home buyers seeking a place to retire are particularly drawn to the Nevada side of Tahoe because of its income tax benefits. But the California side gives you a little more property for your money, Fair says, since there’s slightly less demand.

Image 1:  Finding a second home location on a lake provides opportunities for kayaking and other water sports.


One exciting alternative to the typical condo or cabin, Fair adds, is the hotel-condo concept. “It’s like a staying in a luxury hotel, with a concierge service, a pool, fitness facilities, underground heated garage and so on—but it’s wholly owned, not a time-share,” he says. Although the price tag is hefty for such a unit, it’s “a lock-and-leave package that’s perfect for affluent baby boomers who don’t want the day-to-day concerns of typical home ownership.”

Bruce Raskin of Palo Alto had vacationed in southeast Idaho for years with his family before deciding to buy a piece of land there and build a second home. But it took him a while to warm up to the idea. Despite friends’ repeated urgings, he says, “I thought, why buy when I can stay in a cheap motel? I finally realized I wouldn’t be working full time for the rest of my life and could go for extended stays.”

His home is on the Snake River, a locale he chose for its superb fly-fishing. His wife loves it for the wildlife, hiking and bird-watching. And they have a circle of California friends who own getaways in the same area, giving them a built-in community when they’re there. Because Raskin is now self-employed and his wife is a teacher with summers off, they log in as many hours at their Idaho home as they would at a weekend home closer to the Bay Area. “We’re able to spend the whole summer there together,” he says. “And I go back for another three weeks in the fall.”

Sunny Skies

The chilly Northern California winters prompt many second-home buyers to seek warmth. Arizona, with its abundant recreation and proximity to California, is a favorite spot. The Phoenix area enjoys 300 sunny days a year, attracting a large population of “snowbirds”—retirees who show up for the winter, then migrate back to their primary home in the spring.

Popular choices for warm-weather getaways outside the United States are Mexico, the Caribbean and Central America, says Cheryl Weber, an agent with the western-states real estate agency Windermere Realty and an international property specialist. Weber is a keen proponent of buying abroad, for more reasons than just vacation. “The greatest reward,” she says, “is the opportunity to live in another culture and share [in] that daily life.”

But she emphasizes the importance of working with an expert on the purchase, since there are many issues to sort out. For instance, holding title to the land your house sits on is not a given in certain areas of Mexico. “If a client knows that up front and they still want to buy there, that’s fine. It’s just important to be knowledgeable.” Likewise, she says, “with cross-border transactions, you need an accountant who can tell you the tax implications.”

Lorna Kellogg of Petaluma, who has bought and sold several second homes, is bullish on Hawaii. She originally purchased her Kauai town house as a place to stay during her frequent trips to the island, intending to rent it out to vacationers between her own stays. But she found it tough to find a reliable property manager. “Doing business in Hawaii is very relaxed,” she says. “It requires immense patience, as well as tolerance for different business standards.”

Her solution was to rent to long-term tenants. She handles the rentals herself and has a friend on the island on call for any tenant needs that arise. (Hawaii requires absentee landlords to have a local property manager.) “It sort of defeated my purpose in buying it,” she says with a laugh, but she’s still delighted because the property has appreciated substantially. “It turned out to be a great investment,” she says. Kellogg plans to continue buying Hawaii properties, in particular on the Big Island. She’s also building a house in Colorado. She finds traveling to her various long-distance properties simple: “I hoard my airline miles.”

Wherever you’re considering buying, EscapeHome.com’s Hehman advises taking time to assess what you want and really get to know an area. Don’t buy on impulse because you fall in love with a property, he says. “By far, we find that the people who are very clear on what they want going in get the most enjoyment out of their property.”

Image 2:  Fly-fishing near Bend, Oregon.

If You Rent It Out

Find a reliable, hardworking property manager, Lorna Kellogg suggests. Ask for referrals from other property owners. If you do take your chances with the yellow pages, ask for a half-dozen references. Gene Buccola agrees that referrals are the way to go. “Ask the local bank manager or a mortgage broker. You’ll find that the same names come up over and over.”

Kellogg advises giving your property manager a financial
incentive to keep the place booked. Also, she says, insist on a minimum length of stay. Fewer people in and out makes for
less wear and tear.

As an alternative to a local property management company, Richard Hehman recommends HomeAway.com, which lists and manages vacation rentals online.

“Make sure there’s a designated secure area you can keep locked to hold your personal belongings,” says Greg Venezia, author of Buying a Second Home: Investment, Getaway or Retirement. “Otherwise, you’ll be schlepping your stuff back and forth in between renters. Something as simple as an oversize closet in a bedroom or closed storage in the garage may do the trick.”

Important: Understand the tax implications. Deductions change depending on how many days per year you rent the place out.