Christine Karpinski:  I'm Christine Karpinski. Thank you for listening to the How to Rent Vacation Properties By Owner podcast.

Christine:  Today's guest is Peter Lora. He is a real estate agent in Taos, New Mexico. I'm sure that some of us are going, “Hmmm...Where';s Taos?” and we all know where New Mexico is of course. But he's going to talk to us a little bit about the real estate market there, about the vacation rental market, and of course give us a little general information about Taos itself. Peter, thanks so much for joining us.

Peter:  Hi Christine, thanks for having me.

Christine:  OK, so if you can first off tell us a little bit about yourself. You';re a realtor...

Peter:  Yeah, I'm a realtor. My wife and I run our business together with our one associate Brandon Rose. We've been at it nine years prior to that. Amanda and I both come from the hotel and resort management industry. And that's in fact how we wound up in Taos, by Santa Fe.

Peter:  After living in the Caribbean, coastal South Carolina, a lot of places, and we just fell in love with Taos. And when we got tired of hotel management, we decided we didn't want to leave Taos, and we decided real estate would be a good way to make a living, and it's worked out just great.

Christine:  Well, that's an interesting way to get to Taos, and you said you've lived in the Caribbean for awhile, and then ended up in Taos. That says a lot for Taos!

Peter:  Yes. I thought that I would miss the ocean. I've lived by the ocean for a lot of my life, but I just absolutely love this high desert environment here. Taos is nestled in a valley at the base of the Sangre de Cristo Mountains, which are just a magnificent range of mountains.

We're at 7,000 feet elevation; it is high desert, so we're very dry. There's very low humidity, we're sunny over 320 days a year. The air is clean, there's very, very little of any kind of pollution, even light pollution. It's a beautiful climate, and there's so much to do here, outdoor recreation.

There's lots of history and culture even though we're a small town. We're a lot like Santa Fe, but smaller, and I think friendlier. Santa Fe's gotten rather large. We're about an hour and ten minutes north of Santa Fe, and two hours and 15 minutes north of Albuquerque. So, we're not that hard to get to, but we are definitely in a more rural setting.

Christine:  Right. And it's a good area for year round, really because you've got great skiing there. I think that's probably the southern most ski area in the West, correct?

Peter:  It is one of the more southerly ski areas; it is a world class mountain. It's never crowded in relative terms, compared to what you hear about it in Colorado. It's a great mountain, a lot of steep terrain, but probably the best ski school in the country. The Ernie Blake Ski School is just fantastic.

And so yes, we have skiing in winter, but in the summertime we've got fabulous hiking, river rafting, we've got a very good golf course here. We've got all the art, we have 75 art galleries, there's always events going on in the art world. There's just a whole lot.

There's the Taos Pueblo, which is an Indian pueblo which has been inhabited for probably, almost a 1,000 years. And there's a tremendous interesting confluence of cultures between the Indians, the Spanish that came after, and now of course there are the Anglo wave that's been appreciating northern New Mexico for a 100 years or so.

Christine:  Right, right. It sounds really interesting. Actually, I've never been there, although I have to put it on my list now!

Peter:  You really should.

Christine:  Now of course, I have known about Taos. It's on our short list. My husband and I, we live in Austin, and we keep saying one of these weekends we're just going to go up there and check it out. But I'm afraid if I do, I'll end up buying something there!

Peter:  I'd be happy to help you with that.

Christine:  Well, let's talk about the buying portion of Taos, tell us a little bit about the market there.

Peter:  Sure. Well, in terms of market activity, we're fair. We're in a slowdown here, not caused by any kind of bubble here, but more by bubbles and other problems in other parts of the country. Most of our buyers are buying second homes, retirement homes, they're not moving here for a job so they don't have to buy.

And while people are still dealing with negative news about the economy, and gas prices, and real estate values in their home markets, a lot of people have just put their purchase decisions in Taos on hold for awhile. So, that's why we're in a bit of a slow down.

Christine:  Right.

Peter:  That does mean it's a great time to buy here. It's definitely a buyer's market.

Christine:  Right. And historically, it's been a pretty steady market. Is that true?

Peter:  Very steady. We really have never had falling prices. Our prices—actually their still increasing, although not at the rate that they were. So, we never had overbuilding, we never had speculative investment buying.

We don't have a lot of borrowers that are upside down on mortgages, so it's been a steady price increase. And I truly believe that when the market does regroup, and we get past all this negativity, that I think Taos will be a very strongly performing investment, if that's what someone's interested in.

Christine:  Right. And I can imagine that a part of you living there, choosing it as your retreat, where you live, there's got to be a little bit of resistance to a lot more growth, right?

Peter:  There is, and the good thing is that I don't think that we will have too rapid growth here. We are a little bit harder to get to, we don't have— at this time— a commercial airport. We do have a private airport that can handle, you know, Gulf Stream aircraft. But we don't have scheduled air in here, at this time.

And so, people that...you know, that the heavier growth will always be in places like Santa Fe. And so, we will grow steadily but not, I don't believe, in any way that will change the special nature, you know, what makes this place attractive now— I don't see that disappearing in a deluge of growth.

Christine:  Right. And that typically keeps your market very constant if you don't have those surges, the absinth flows in the building and in the growth and stuff like that. It kind of keeps it on an even keel.

So now, the buyers that are coming to those markets, where are you primarily seeing them come from? Is it Texas and Arizona and, you know, maybe Colorado surrounding‑state or is it international or— Where are they coming from?

Peter:  We have— the bulk of our buyers, I mean, I don't really know statistically what percentage but, yes, our drive‑to markets from the states that you've mentioned—Texas, Arizona, Colorado, Oklahoma— they comprise a large chunk of our buyers.

But we do attract people from both coasts and even from, you know, the middle of the country – Chicago. We have some international buyers but not a lot. I think the international buyers, again, are more just aware of Florida, California...

Christine:  Colorado...

Peter: …Or Phoenix, perhaps. You know, Las Vegas— those kinds of markets.

Christine:  And you said before that primarily, they're buying for second homes, right?

Peter:  Second homes, pre‑retirement homes, you know, vacation homes— whatever you want to call it. But very few people are just relocating here for work. So, that's... You know, that's— they're not pure investors either. Some people will put their homes into a rental program or rent it out themselves through, you know, one method or another.

Christine:  Right.

Peter:  But pure investment has— is a small segment of our market. Most people want to use the property that they're buying.

Christine:  Right and I think that's probably true of most vacation markets. That most people go into it, buying it, you know, because they love the area and they want a second home that they can use. And so do you have any gauges to the percentage of people who purchase and do rent their properties?

I mean, I know that Taos is some sort of vacation‑rental‑friendly market as opposed to Santa Fe where they're not real friendly with vacation and else they've got a lot of regulations around it. So any idea what percentage of people are buying with the intentions of renting?

Peter:  Yeah, it's just my personal anecdotal estimate but I would say 60% to 65% on the high end. And again, that is probably— the amount that people rent their properties out varies tremendously. A lot of people, you know, use the property a lot. And there are not many people that are just buying a house or a condo and using it for just two weeks and then renting it out for the rest of the year— that's not very common.

Christine:  Right, which 60% to 65% is significant compared to the national average. You know, I think in 2007 the NAR reported that it was around 25% of people who purchased a home— vacation home— intending on renting it. Some are part of time or most of the time when they weren't using it so, significantly higher which is a good thing.

Oh! Can you hold on one second? We just need to take a break for a word from our sponsors.

Christine:  So what about prices there? You know, what does it cost to get into the market there? What's sort of the low‑end?

Peter:  Sure and of course...Are we talking condos or single‑family homes?

Christine:  Well, let's kind of talk both.

Peter:  All right. Well, you could buy a nice condo for $175,000 to $250,000. That would be the low‑end. The medium range in condos would be $250,000 to $400,000, I would say.

Christine:  Right.

Peter:  And the high‑end would be $400,000 to $600,000. As you can see— if you're familiar at all with other Rocky Mountain resort areas— we're very affordable, I mean...

Christine:  Yeah, pretty affordable.

Peter:  ...Vail and Aspen, you're going to pay you know...

Christine:  A lot more than that!

Peter:  ...Two or three times as much for a very dated, you know, condo. In homes, I would say the low‑end ranges from $275,000 to $400,000. The mid‑range would be $400,000 to $850,000. And the high‑end would be $850,000 to $2 million.

Christine:  OK.

Peter:  We don't have a lot of really, you know, high‑end homes the way Santa Fe does or again, Aspen, Vail, Telluride— those kinds of places. You just don't find 10,000 square‑foot mansions and things like that here.

Christine:  Right, right. Now, with regards to the condos versus the homes, do you have any idea like percentage‑wise, are there a lot more condos than single‑family? Or is it vice versa?

Peter:  Well, I don't know in terms of the number of units existing and there was kind of a boom in building condos a few years ago. None had been permitted or, for whatever reason, there just hadn't been a new construction for quite a while so...

Christine:  Right.

Peter:  ...You know, several hundred new units were constructed. I'd just roughly say there's probably an equal number of condos and homes— not on the market...

Christine:  Correct. Right, right.

Peter:  ...At any one time. I said there are more condos on the market than homes. But in terms of existing structures, it's probably, roughly equal.

Christine:  And that's actually kind of unique to your market as well. I mean, because there's a lot of places that you go where— I'm just thinking coastal properties— there's a lot more condominium units in the coastal areas than typically, single‑family dwellings.

And I'm thinking like even Gatlinburg, Tennessee, which is a very popular market. That's an area where there's a lot more single, structure cabins than there are condos. To have sort of a split is interesting as well.

So that then brings me to the next thing about the rental aspect. As far as renters are concerned, there's not a forcefully higher demand for one or the other, it's probably pretty equal as well. Is that correct?

Peter:  I would say so, yes. There are people that want a home, they'll book for a week, they just like the extra space. Sometimes, maybe, two families might share a home. And then there are people that just come for weekends and a condo might make more sense. And again, it depends on where you want to be. But even right at the Ski Valley there are some homes for rent up there, although it's mostly condominiums at Taos Ski Valley. In town it can be one or the other.

Christine:  Right. Interesting. What about rental rates and occupancy rates and all that. If you were to buy a place, let's just say you buy a mid‑range condo at like $250,000 or $350,000, do you have any gauge to whether or not you would be able to make that money up with the rentals?

Peter:  Well again, it's going to depend on a couple of factors: how much you use it yourself, what sort of management you employ, but best case, if you hardly used it yourself and managed it yourself, or booked a lot of the business through a website or something like this and just organized your own housekeeping and such, depending on where it is located, you might be able to get close to break even, but I would not promise that to a buyer.

Christine:  Never.

Peter:  I think that most buyers here like to get some help on their overhead, but really I think the long term appreciation is what most people are interested in.

Christine:  That's where they see their benefits.

Peter:  They use themselves, long term appreciation for some people of course their after tax situation varies. So if you're able to deduct interest payments or the appreciation, those sorts of things. Again it will change the individual return on investment calculation.

Christine:  Absolutely. But it sounds as if it's a year round market, it sounds like the demand is decent that you can really, significantly offset some of your costs associated with owning it through renting it.

Peter:  You can.

Christine:  If you are doing it by owner, which of course, because I am the rent by owner queen, I'm always an advocate of everybody renting their properties by themselves without the use of a property manager. But you know, it's not for everyone, I always say that.

Peter:  No, and even if you use a property management firm, and we have several good ones here, yes you're going to pay a little bit more but sometimes you do get what you pay for and if you're not coming up a lot, you need people to check on the property, make sure that everything is working well, that there's a local contact person for a guest to call if there's a problem, etc., then that may result in a happier guest who repeat books in the future.

Christine:  Right. That's really up to the individual homeowner as to whether or not they decide to do it that way.

Well, you know what? We're getting close to running out of time here and I want to before we conclude, ask you if there is anything else that I didn't ask you that you think that the listeners absolutely need to hear about your area or about the homes in your area?

Peter:  Well, I've told you about the climate and the natural beauty of the place. One of the trends that we are seeing here and of course it's happening in a lot of places in the country, but we're on I think the leading edge of interest in energy efficiency and alternative building systems.

We've got a strong solar energy presence here, we are so sunny and there are people really interested in sustainable, building materials here, so I think that that's an interesting trend that Taos is a leader in and it's just really one of those places that offers a lot. You can't typecast the kind of people that are here.

There's a real diversity of people and it's a very interesting place, it has a small town feel, you can get to know people easily if you want to and then on the other hand if you want to be anonymous it's easy to do that too. I just think it's a wonderful place and I would love to show it to you some time.

Christine:  Absolutely. So now, the next thing is, if I wanted to come see it and wanted to get a hold of you, I think we need to give everybody your contact info. So, your phone number?

Peter:  The office phone is 575‑758‑3275.

Christine:  Let me say that again. It is area code 575 and the phone number is 758‑3275. There are lots of sevens and lots of fives. But of course, as usual, we will have this on the website on OwnerCommunity.com.

And, Peter, what is your website?

Peter:  Real Estate Taos.com. That's all one string.

Christine:  And Taos is spelled...T-A-O-S. So it's Real Estate Taos.com.

Peter:  That's correct.

Christine:  Peter, thank you again so much for joining us.

Again, our guest today was Peter Lora. He is a Realtor in Taos, New Mexico. And if you're interested in buying in Taos or even just want to go on vacation, definitely give him a call, I'm sure he'd be happy to show you some homes.

Christine:  Well, that wraps up this episode of The How To Rent Vacation Properties By Owner Podcast. I'd love to hear your feedback. Remember my email address is OwnerCommunity@HomeAway.com.

Thanks to HomeAway.com, our producers Leah Carroll and Kristin Dorsett, our announcer Amy Ashcroft Greener and our sound engineer Larry Seyer.

Happy renting by owner and don't forget to take some time to enjoy your vacation home yourself.

© Copyright 2008 HomeAway, Inc.