Dolores Tropiano, Special for The Republic
In many areas, buying a second home is a luxury. In metro Phoenix, it can seem like a necessity.
Suffer through enough scorching summers and the idea of buying a second home will eventually work its way onto your wish list.
And one look at the lineup of cars heading for cooler climates each summer shows that a substantial chunk of people have already done so.
Penny Koepke was one of them.
In 2009, she and her husband, Dave Koepke, bought a three-bedroom house in Munds Park near Flagstaff.
“We wanted a place to get to quickly and easily to escape the heat,” said Koepke, 45, of Paradise Valley.
The Koepkes chose Munds Park in part because the area brought back memories of their childhood summers — warm days, cool nights and kids running for the ice-cream truck each afternoon.
“It reminds my husband and me of the Midwest where we grew up, and it takes two hours door-to-door to get there,” said Koepke, a lawyer with Ekmark & Ekmark LLC in Scottsdale.
They partnered with another family to cut costs on their second home, which came fully furnished.
“They were thinking of getting a second home, too, so part of it was financial,” she continued. “We didn’t think we would use the cabin all the time, but we wanted a second home, and we had vacationed with them numerous times and got along famously.”
Initially, Koepke had concerns about the purchase.
“I was worried about not being there enough and not knowing if the roof was leaking or mice were running rampant,” she said. “Mainly, we were concerned about maintenance. If we were not there and a pipe burst, how were we going to find out about it, since there are not a lot of permanent residents up there?”
Koepke said they took a proactive approach to maintenance: winterizing the home, putting the water heater on vacation mode, turning off pilot lights, etc.
“We have not hired a caretaker, but do common sense things people do when they own a second home and basically hope nothing goes wrong,” she said. “And we have it well insured.”
Koepke encourages people to contemplate the extra costs when considering the purchase of a second home — expenses such as furnishings, landscaping, maintenance and general amenities. Such expenses have to be covered, and, if the house is co-owned, shared.
“Think about the incidental expenses,” she said. “We loved our home, because it had a beautiful lawn. In the beginning, we would go up and Dave would mow and I would weed, but eventual we hired a landscaper. That was an added expense.”
The cost of propane in the winter was another factor, as was the expense of trash pickup, phones and cable TV.
Koepke thinks it’s also important to consider how easy it is to access your home. “The I-17 can back up for hours when an accident takes place,” she said.
And plan for exit strategies if you are buying with another couple or person.
One exit strategy would be getting the house appraised (each owner could use a separate appraiser, if necessary) to establish a buy-out price, for example.
“We trust each other that when time comes we would still be able to work something out,” Koepke said. “But that being said, I would still put something in writing, because circumstances change.”
Grab the opportunity
Tina and Todd Gilbreath had been traveling to Munds Park every summer for 10 years to celebrate the Fourth of July at the small-town street parade.
But it was not until Todd found a foreclosure near his parents’ house that the family was able to finally make Munds Park their second home.
“We had been talking about it for ages, and the opportunity just presented itself,” said Tina Gilbreath, 47, a whiz with restoring and creating special spaces. “We had always looked, and it was always more than we could afford. But since this one was in foreclosure, and it was a train wreck, it just sort of happened.”
Todd, a subcontractor, was able to transform the wreck into a restful retreat for family, friends and future tenants, whose rent payments will help offset the expenses.
Tina recommends buying at a good price and trying to be creative with your purchase. Having a a real-estate agent and talking to neighbors in the area can help buyers be in the know about what is on the market.
“I would have never thought of myself as a landlord,” she said. “But once you get a system in place, it’s pretty easy.”
The Gilbreaths bought their foreclosure without a loan, but those who have to borrow for a second home need to be able to cover both their primary and secondary mortgages.
“The biggest challenge with carrying two mortgages is being able to qualify for the second one,” said Chantal Huff, senior loan officer for CNN Mortgage. “You have to have the income to be able to withstand both mortgages, and once you have that second mortgage, there are additional reserve requirements on second homes.”
If the second house is an investment property, that too has special considerations.
“Many people think it’s acceptable to finance a property as a second home, enjoy it for a short period and then rent it out,” said Jay Barbour, president of V.I.P. Mortgage Inc. “But they need to be careful. Financing a property as a second home with the intent to convert it to a rental can result in legal problems as it should have been financed as an investment property requiring a higher down payment and interest rate.”
Paul Guidera bought his second home in a gated community in Pinetop-Lakeside when his five children were young. His wife, Kay, spent the summers there with the children, and the family spent weekends skiing in the area during the winters.
“Pinetop-Lakeside is a great place. It’s easier to get to than Flagstaff, because you don’t have all the traffic you get on the I-17. It’s also quieter and less busy,” said Guidera, 57, a hand surgeon.
A gated community, said Guidera, gave the family a sense of security when they were away as well as a selection of activities when they were there.
Two years ago, when his older children became teens, they refused to go. Guidera reluctantly sold the house, which he knows will be a blessing for the family that bought it.
“If we were in the same situation, in the same point in our lives, we would have bought it again,” he said. “We definitely got a lot of use out of it and enjoyed it tremendously. It was just that our oldest children adamantly refused to come, so we sold it. Ironically, the family that purchased it was in the exact same situation that we were when we bought it. The husband was a doctor with three young children.”
Reach Dolores Tropiano at email@example.com.