Business Insider

If you’ve got the cash, a second Idaho home may be right for you

“For Sale” signs are popping up like mountain trillium flowers in and around McCall. The Idaho Land Board has approved the auction of five additional building lots, known as unleased cottage sites, for fall 2016. Does second-home ownership sound appealing to you? What do you need to know before making the commitment?

“Sperling’s Best Places to Live” notes that the median McCall home costs $224,000. The cost of living is 8.3 percent higher than the U.S. average. Home values appreciated 2.3 percent in the past 12 months. Median prices and the cost of living are significantly higher in the Sun Valley area.

Pricing issues and market valuation for second homes are no different than for primary residences. Anyone who owned recreational property during the housing crisis knows that prices can fluctuate wildly in response to economic and market conditions. If your primary goal is rapid price appreciation for immediate resale, this implies speculation. Avoid it.

Exclusive use of a secondary residence is another consideration. Does your schedule allow multiple visits during the year? Feeling “locked in” is a common concern. If you want to visit different destinations, you might be better off renting a place or buying a timeshare.

If you need to manage costs, rental income-producing property that offsets expenses, or shared ownership, offer flexibility.

Second homes may be an asset on your personal balance sheet, but they also represent an expense. You need adequate excess cash flow to care for a second home and to pay for property taxes, utilities, snow removal, sewer and water service, and property maintenance. Make sure your income allows for these.

Mountain summers are short. Early pioneers from Finland joked about three seasons: July, August and winter. Spring and fall can be beautiful in the mountains, but don’t expect perfect conditions every weekend. Enjoy a winter sport such as skiing or snowmobiling, too. We’re fortunate McCall and Ketchum are within a two- to three-hour drive from Boise.

Owning a second home is a lot of work but may offer its own rewards and satisfaction, and may fit well with overall planning and retirement goals. So enjoy a cool beverage on your second-home deck when this summer’s sweltering heat sends hordes of valley dwellers to higher elevations.

Mark Daly is managing director and investment officer at Daly & Vachek Investment Consulting Group of Wells Fargo Advisors. (208) 333-1433. This column appears in the May 18-June 14, 2016, edition of the Idaho Statesman’s Business Insider magazine as part of a special section on travel.