Santa Cruz is famous for its golden shores, natural beauty, and family-friendly vibe. It is no surprise vacationers love it here – the beaches are ideal for surfing, the mountain hikes are perfect for active families, and the charming shops and cafes cater to every taste. For all those reasons, Santa Cruz is also the quintessential location for a second home that can generate its own income.
It’s important to look at some benefits of investing in vacation homes in Santa Cruz and how buying a home here can help you earn passive income through rentals. Here are some practical tips on finding the right home that meets your requirements and maximizing your return.
Vacationers love Santa Cruz
Benefits of buying a vacation home in Santa Cruz
Santa Cruz also boasts a unique mix of attractions and amenities for vacationers. There are plenty of active outdoor activities, such as surfing and kayaking, and cosmopolitan cities like San Francisco are only a short drive away.
Not to mention, beachfront properties can be great investments and offer the potential for year-round income. Predictably appreciating property value is another benefit of investing in a Santa Cruz vacation home and ensures a dependable return on your investment.
Is a vacation home a good investment?
With careful planning and research, buying a vacation rental home in Santa Cruz can be an excellent investment. In addition, keep in mind the costs associated with owning a property outside the mortgage – property taxes, homeowners insurance, maintenance expenses, and marketing costs. You will also need to invest in attractive furnishings and market your rental property to attract guests.
Finding the right vacation home
Look out for properties that are accessible year-round and feature immediate access to nearby attractions. Also, consider properties with multiple bedrooms and bathrooms to increase rental income. And, of course, you should always work with a real estate agent familiar with Santa Cruz real estate in general and vacation homes in particular.
Maximizing rental income
Another benefit of working with a property manager is that you will not have to worry about learning all the ins and outs of the local rental market, such as calculating and reporting occupancy taxes. A professional will also have experience in marketing the property. While you may pay anywhere from 10% to 15% of your rental fees to have someone else manage the property, it may result in higher profits for you by attracting more vacationers.
Accounting for costs
Also, consider the additional costs associated with owning a holiday home in Santa Cruz, such as transfer taxes, association fees, and other expenses that may vary from property to property. In addition, you should set aside emergency funds to cover less predictable costs such as replacing a water heater or major appliance. When you are simply buying a vacation home for yourself, it may be acceptable if the home is without hot water for a few weeks. When you are using the property to generate income, that is time you are unable to accommodate any vacationers.
Understanding rental income taxes
In addition, there may be sales taxes to calculate. Making sure you report everything correctly and do not incur any fees from missed payments can be another good reason to hire a professional to help manage any rentals.