If you’re thinking about buying a vacation home in Lake Tahoe, chances are you’ve got a pretty solid vision in mind. Maybe it’s summers spent kayaking on the lake, crisp autumn mornings on the golf course, or cozy winter nights by the fire after a day of skiing. But here’s the thing—owning a second home in Tahoe isn’t just about having a place to escape to. It’s about building something that lasts, something that becomes part of your family’s story. For many people, it’s a legacy—a retreat to pass down through generations.

Now, I get it. I’ve been there. We bought our legacy home in 2024, and trust me, it was exciting, but it was also a little overwhelming. Whether you’re thinking about a home purely for your own enjoyment, as a part-time rental, or as a long-term investment to build wealth, having a solid financial plan is key. So, let’s break down what you need to know to budget for your Tahoe vacation home—and avoid any surprises along the way.

Let’s Talk Down Payments: The First Big Step

The first thing you’ll need to think about is your down payment. Unlike buying your primary residence, second homes come with stricter lending guidelines, which usually means you’ll need to put down more upfront. Typically, you’re looking at 10-20% of the purchase price.

If you’ve got your eye on a $1.5 million property—which isn’t uncommon in Tahoe—that means:

• 10% down is going to run you $150,000.
• 20% down? That’s $300,000.

Now, depending on your situation and the lender you’re working with, you might qualify for certain conventional loan products with a lower down payment. But in most cases, especially for higher-end properties, you’ll be looking at that 20% mark. And since Tahoe homes often fall into the jumbo loan category, it’s really important to work with a lender who knows the ins and outs of second-home financing.

Beyond the Purchase Price: Ongoing Costs You Need to Know

Alright, so you’ve got your down payment sorted out—but that’s just the beginning. Owning a second home in Tahoe comes with its own set of ongoing expenses, and it’s important to factor these into your budget from the start.

First off, property taxes. You can expect to pay around .07 – 1.25% of your home’s value annually. So, for that $1.5 million property, you’re looking at somewhere between $10,000 and $18,750 per year. Not a small number, but definitely manageable with the right planning. 

Then there’s insurance—and in Tahoe, wildfire insurance is a must. Depending on where your home is located and the type of coverage you need, you could be paying anywhere from $2,500 to upwards of $8,000+ a year. 

And don’t forget about HOA fees if you’re buying in a gated community or a condo development. These can range from $4,800 to $14,400 annually, covering things like snow removal, utilities, exterior maintenance, and community amenities. It’s an extra cost, but for many homeowners, the convenience is worth it.

Picking the Right Spot: Tahoe’s Diverse Neighborhoods

Choosing the right neighborhood is a big part of the budgeting process because where you buy can impact everything from your property value to your rental income potential.

Let’s break down a few of Tahoe’s standout neighborhoods:

• Incline Village is perfect for families who want year-round activities. You’ve got private beaches, golf courses, ski resorts—the whole package. Plus, it’s a strong market for vacation rentals, which is a nice bonus if you’re thinking about generating some income.
• Carnelian Bay & Tahoe Vista offer a more relaxed, lakeside vibe. Think easy access to beaches, boating, and hiking trails. If you’re looking for scenic beauty and outdoor recreation, this might be your spot.
• Cedar Flat is a peaceful, tree-lined community with a mix of charming cabins and high-end homes. It’s great if you’re after a quiet mountain retreat.
• Crystal Bay is where you’ll find some of Tahoe’s most breathtaking views and luxury homes. If exclusivity and a high-end lifestyle are on your wish list, this is the place to be.

Each of these neighborhoods has its own vibe, and the right choice depends on what you’re looking for—whether it’s adventure, relaxation, or a bit of both.

Seasonal Maintenance: Keeping Your Investment in Top Shape

Now, let’s talk about something a lot of people don’t always think about until winter hits—seasonal maintenance. Tahoe winters are beautiful, but they can be tough on homes. You’ll want to budget for things like:

• Snow removal: Whether you’re hiring a service or handling it yourself, expect to spend around $1,000 to $2,000 a year to keep your driveway and walkways clear. In heavy snowfall years, you may also have to have your roof shoveled for an additional fee. In 2023, we had our roof shoveled for an additional $3,000. 
• Winterization: Protecting your pipes from freezing, maintaining your heating systems, and prepping your home for heavy snowfall are essential for avoiding costly repairs.
• HOA or private maintenance: If you’re in a community with an HOA, some of these tasks might be covered in your dues, which can be a big help.

Keeping up with these maintenance tasks ensures your home stays in great shape—and that it’s ready to enjoy whenever you want to escape to the mountains.

Renting It Out: Turning Your Home Into an Asset

One of the best parts about owning a vacation home in Tahoe? Short-term rental income. If you’re not planning to use the property year-round, renting it out can help offset your costs and even turn your home into a serious income-generating asset.

That said, Tahoe has strict rental regulations in certain neighborhoods, so it’s important to do your homework. Make sure you:

• Research local vacation rental laws before buying your Lake Tahoe Realtor for guidance.
• Factor in management fees if you’re not planning to handle bookings and maintenance yourself.
• Consider seasonality—summer and winter are peak rental seasons, so plan your usage accordingly if you want to maximize your income.

Done right, renting out your Tahoe home part-time can make a big difference in covering expenses and building wealth over time.

Bringing It All Together: Budget Breakdown for a $1.5M Tahoe Home

To give you a clearer idea of what to expect, here’s a quick breakdown of the costs for a $1.5 million home in Tahoe:

• Down Payment (10-20%): $150,000 – $300,000
• Closing Costs (2-5%): $30,000 – $75,000
• Monthly Mortgage (6% on $1.2M loan): ~$7,200/month
• Property Taxes (.07-1.25%): $10,000 – $18,750/year
• Wildfire Insurance: $2,500 – $5,000/year
• HOA Fees: $4,800 – $14,400/year (if applicable)
• Snow Removal & Maintenance: $1,000 – $2,000/year

Knowing these numbers upfront will help you plan effectively and avoid surprises.

At the end of the day, buying a vacation home in Tahoe isn’t just about the dollars and cents—it’s about creating a space where your family can gather, unwind, and build memories that last a lifetime. Whether it’s for your own enjoyment, as an investment, or both, a Tahoe home is a legacy you can pass down through generations.

If you’re ready to explore your options, I’d love to help you navigate the process. Let’s make 2025 the year you invest not just in a home, but in your family’s future. Give me a call!