Protecting Your Palm Springs Vacation Home Investment

Palm Springs – bar none – is one of the best places in the country to have a vacation home … especially if your primary residence screams “winter, winter, winter” months after Groundhog’s day!

The wise investor however accomplishes more than just the identification of his residential asset, he learns how to protect it too.

In today’s Palm Springs real estate market there is much risk but more opportunity. Making the right decision on the Palm Springs investment property to buy and how to protect it once acquired, is essential to successfully building your real estate portfolio.

Whether you currently have a Palm Springs vacation home, or plan on buying one in the near future, below are some helpful tips on how to “bubble-proof” your important investment in addition to creating an “income-producing” asset. Palm Springs Second-home Buyers heed the advice of author Christine Karpinski, author of How to Rent Vacation Properties by Owner and Profit from Your Vacation Home Dream, a book on vacation home investing. She believes vacation homes are still a good investment and says, “If you make well-researched, educated decisions, you’ll be setting yourself up for success, not failure.”

When buying a Vacation Home in Palm Springs keep the following in mind:

Start with a Plan – whether for personal use or investment, begin with the end in mind. Create a business plan that helps you analyze your property of choice as an investment. This takes a lot of research and should be done with the help of your Palm Spring realtor.

Stay Focused on the Investment and Avoid Becoming Emotionally Attached – regardless of whether your Palm Springs home is for personal use or investment only, the numbers have to make sense. Make sure it is a wise investment, do your due diligence and review as an investment, not through rose colored emotional glasses. This is a big financial commitment even for those with cash to spare. Revisit your plan, know your limits and stick to your pre-defined budget – this will help keep your emotions in check.

Know the Area and Use your Palms Springs Realtor – ask a lot of questions. Do your own online research and absorb as much information as possible. Pick your Realtors brain about the area and its history and observe whether the area is more developed or a new emerging market. A seasoned, mature area is established and greater longevity. An emerging market can be more risky as there may be more inventory a lack of community resources and everyday conveniences.

Leave your options open> – you may want to buy a Palm Springs vacation home with no intention of ever renting it out. But while today it may be financially feasible to not rent your home, you’re never sure what the future will bring. Your finances may change. The tax rate for the property could skyrocket. Buying in an area where you know you can utilize the option to rent your property is a great way to leave your options open.

With that being said, stay away from areas with short-term rental bans. “The best way to protect yourself from market fluctuation is to have the option of renting your property on a nightly or weekly basis when you are not using it. Some complexes or counties have areas where there are covenants or laws against renting on a short-term basis. If you stay away from purchasing in those areas, you’re more likely to be able to turn your vacation home into an income-producing asset.”

For more tips from Christine Karpinski on how to own and rent Palm Springs vacation property, visit www.howtorentbyowner.com.

Interested in buying or selling a home in the Coachella Valley area? Contact Patrick Stewart Properties.