A Step-by-Step Guide to Owning a Vacation Home in St. Helena

A Step-by-Step Guide to Owning a Vacation Home in St. Helena

  • Avi Strugo
  • 11/8/22

Owning a vacation home in Napa Valley – not to mention St. Helena, one of the area’s most gorgeous towns – is a lifelong dream for many. Yet once you get closer to the details of purchasing and maintaining a vacation home, living that dream can sometimes get a little complicated. That’s why we’ve compiled an authoritative look at what it takes to own a piece of St. Helena real estate for yourself. Without further ado, let’s get started!

Know the best time to buy

The first step to owning a vacation home in St. Helena is to understand when the right time is for you and your family to set out on the home-owning process. You’ll want to weigh the pros and cons, and ask yourself questions like:
  • Do I want to own the house as an investment, a get-away refuge, a rental property, or a mix of them all?
  • How is my financial health? Am I expecting a consistent income in the coming years?
  • What does the local real estate market look like?
  • How has the St. Helena market changed over the years?
Overall, St. Helena has been a historically sound location to invest in a vacation home. Its central location is ideal for those living in the San Francisco/San Jose area yet the charming population of 6,000 keeps the small town feeling fresh and vibrant year-round. The average price of homes in St. Helena has grown nearly 5% from August 2021-2022, which indicates an extremely opportune time to own a vacation home in the area.

Get in touch with a local real estate agent

Next on your list of to-do’s when considering owning a home in St. Helena is to contact a knowledgeable real estate agent. This may seem like a no-brainer, but the advantages of working with a local agent can be enormous, especially when investing in a second home. Local agents have more experience communicating with other agents and therefore more insight into recent changes in the market.
Agents will also be able to answer any questions about California real estate standards and help you navigate the intricacies of owning a vacation home. It’s truly invaluable to have an experienced realtor with you whenever you’re setting off on the process of finding and purchasing a new property.

Be realistic about affordability

It’s critical to be upfront with yourself, your family, and your agent when deciding on the right price point for houses for sale in Saint Helena, CA. Right away, you should determine whether you can purchase the home in cash or if financing is better for you. From there, research local lenders and keep up to date with interest rates.
If you’re thinking about renting the property for more than 15 days per year, you’ll also have to consider that the IRS will require you to report that income and claim whether you “actively participated” as a property manager. Given that the average price of St. Helena luxury real estate stands at just over $1.5 million as of August 2022, it’s important to be realistic about what you can afford.

Read up about the area

The old idea behind home ownership is still true: “Location, location, location” matters. Owning a home in St. Helena certainly carries a lot of benefits, including top of line schools, a quaint downtown area with a variety of local boutiques, wine tasting experiences, and restaurants, and a charming local population of down-to-earth residents.
Still, it’s worthwhile to read up about the area to make sure that this special place is right for you. Many new homeowners telecommute to work and the wine culture looms large in the area, understandably. Take a trip to the area if you can to absorb the local lifestyle – it will pay off in the long run.

Understand your financing options

The next step to owning a vacation home in St. Helena is perhaps the most important. As long as you’re planning to finance a second home, you should know what to expect in advance. This includes:
  • Applying for a letter of preapproval from your lender
  • Preparing to make a standard 20% down payment (more or less, depending on your mortgage terms)
  • Ensuring your income and savings are sufficient to buy a homeowner’s policy and make regular property tax payments
Generally speaking, there’s little difference between purchasing a first and second home. However, make sure you contact your realtor well in advance to make sure that you’re complying with local property laws. Being proactive at this stage is a good way to ensure that the home buying process goes smoothly and that you take advantage of a real estate market that is growing healthier and healthier every year.

Don’t forget about hidden costs

Maintaining a vacation home can sometimes become a full-time job, but it doesn’t have to. For one, vacation homes generally carry higher mortgage payments (usually 0.5 to 0.75% higher than those for primary residences).
Homeowner's insurance on vacation homes can also climb above what you’ve expected in your first home. If you’re going to rent the property for a period of time, then you’ll likely need additional insurance coverage as well. (e.g. landlord insurance). You should also consider the cost of property taxes too.

Keep in mind that there can be quite a few hidden costs behind St. Helena luxury real estate ownership. A good estimate is that 1%-3% of the cost of your home’s list price should be dedicated to yearly maintenance. These costs include:
  • Repairs and upkeep
  • Cost of initial renovations and replacing essential systems like HVAC, landscaping, plumbing, and lighting
  • Installing high-speed internet and security systems
  • New decorations, furniture, and appliances

Questions? Contact a real estate agent today!

With that, we’ve covered the essential things to keep in mind when owning a vacation home in St. Helena. If you have any questions or comments, reach out to expert real estate agent Avi Strugo today for answers!

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