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How much does it cost to live in South Lake Tahoe?

Tahoe Investment Properties Presents

Tahoe is a dream for many people who come visit. If you’ve been to Tahoe you know what I mean. The thoughts of “I could live here”, “I’d love a house here”,   “what if I could work up here?” tempt most people.

Who wouldn’t want to live in Tahoe? We have the best summer’s in the world, and epic winters. Different outdoor activities in the summer, spring, winter and fall. Tahoe is an adventure for anyone who lives here. It’s inspiring to just be outside.

If you’re considering a move to Tahoe, I can answer a few questions around how much it might cost you to live up here. In this article we’ll go over the expenses of living in Tahoe, so you’ll have a better idea of what your new lifestyle would cost.

Average rental price

Rent in Tahoe has been on the rise the past few years, however it’s still surprisingly affordable compared to bigger cities in California. I specialize in the investment side of Tahoe real estate. I’ve sold, and helped purchase a variety of rental properties ranging from multi-family apartment buildings, to luxury lakefront homes in the Keys.

I’ve helped my clients identify opportunities in the market based on what rents could be after repairs. I’ve worked with appraisers, facilitated leases, and I’ve helped make rental ads. So as general as these numbers may seem or be, they’re based on what I’ve seen work in our market. Let’s start with the bachelors, bachelorettes, and couples.

1-2 Bedroom Apartments, Houses, and Rooms.

Rooms rent for an average of $500-$800. Add in your share of utilities and you should be way under $1000 a month in total expenses.

Renting a room in South Lake is one of the cheapest ways to get your life started up here. You run the risk of a dirty house, shared kitchen, dog filled couches and potentially drunk roommates stumbling in late on a Tuesday. BUT. This remains one of the cheapest ways to get started, and if you’re lucky, a good way to start making friends.

  • 1 Bedroom Apartments rent for $1500-$1800 a month.
  • 2 Bedroom Apartments start around $2000+ a month.
  • Utilities for 1-2 Bedrooms (Water/Gas/Garbage/Internet): $150-$200 a month.

Apartments range in Tahoe. They range from the “used to be a motel room” apartments, all the way to family style apartment buildings with plowed driveways and new renovations. The sweet spot for most people is a unit in a duplex or triplex. What are the pros of renting a multifamily building?

Better located. Usually in Al Tahoe near the water, Sierra Tract near bike paths, or Stateline near Heavenly and the Casinos.

Cheaper than a developed apartment building. Why might you ask? There’s not a developer bottom line. The more commercial style apartment buildings are run by businesses, as businesses. Meaning rent goes up consistently. Tenants cycle in and out regularly. Profit for that type of investment is the primary focus, and usually there’s more costs associated with having 10-30 units such as an on site manager, handyman etc.  

Landlord’s can be easier to deal with than leasing offices. Most of the multi-family property owners I’ve met in Tahoe are incredibly kind and care about their tenants. They share a love for Tahoe, and understand the grit it takes to make a life here. Their duplex or triplex is a way they can own a piece of Tahoe, and that usually comes with a great sense of pride. They want good tenants, who not only pay rent on time, but who respect and care for their investment. I’ve seen seller’s fight for their tenants during a transaction, I’ve also seen new buyer’s walk around asking tenants what they could do to make their life here better. It’s truly amazing to see people work things out this way.

Bottom line: Go local with your apartment rental. Find a place you love with one or two neighbors, and a solid landlord. Respect gets respect, and Tahoe is a small town. Start building your local relationships with housing.

Average Home price

If you can buy a home in Tahoe-that’s the best investment in housing you could make. Property value continues to go up in South Lake, and I think it always will. There’s a limited building in South Lake, meaning most of the property here will sell, upgrade, and sell again. As a home-owner you leverage money in two powerful ways: equity and appreciation. 

Your house payments pay down what you owe, increasing how much of the property you own (and now don’t pay interest on) = equity. 

As the average property price goes up, so does the value of your home. When and if you decide to sell, your property will likely be worth much more than you bought it for
= appreciation.

In 2020 there were 977 residential properties sold under $1M.

The average price was $538K with a median of $507K.

Take this with a grain of salt, there are some other factors to consider with those prices.

  • Tahoe saw one of it’s hottest real estate years to date in 2020, mostly starting in June.
  • That average calculates a range of property all the way up to $1M. Some of those $700K+ houses are not in the first time home buyer sphere.

Bottom line: With the right agent and lender, you can find a 2-3 bedroom house for $450-$550K. For $500K, at a rate of 2.8%, with 3% down, you’re looking at a monthly payment of $2400.

Check out a mortgage calculator online to play with the numbers and rates yourself.

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Making money in Tahoe. Where do I even begin with this?

Tahoe can be a path for some, and a serious struggle for others. Our community is not built from major corporations with career trajectories. We’re a town of dreamers, locals, small business owners, and restaurants. Most of the business in Tahoe is centered around tourism and it’s seasonal. When I first moved to Tahoe I worked three jobs! This is much more common than you think. Minimum wage is normal, tips are a bonus, and seasonal work is tough. Many people move to Tahoe to work in the ski industry, and in summers work in restaurants. These folks often sacrifice wealth for their dream to live here. Many of them are my closest friends, so next time you’re in town-leave a nice tip!

According to the US Census the median household income in South Lake Tahoe is $49,390.

I recommend you take a look at some of the other averages here. There’s a ton of useful information there including averages per industry, housing, and population.

Bottom line: Ask yourself how could you make a life here before moving? Having a plan will ensure you don’t fail. Tahoe is built on dreamers, entrepreneurs, and adventure enthusiasts. Networking will shape your life here more than anything. It’s who you know, not what you know.

Tips for Saving Money

By now you should have some idea of what it’d cost to either rent or buy. Of course there’s all the costs of moving and relocating you should consider too!

Imagine you made it. You’ve decided to create a life in Tahoe, and you move. Now you’ve got to live like a local. Here’s some of my tried and true tips for saving money, and enjoying life at the Lake.

Take the 25 minute drive down to Carson City once a month.

Carson City is a short drive from South Lake and has most of the stores and shops we’re missing in Tahoe. Here’s what you can do in Carson:

  • Costco up! 

  • Costco gas up while you’re there. 

  • Trader Joes for all the best snack foods and freezer foods. 

  • In-N-Out-needs no explanation.

  • Target, Best Buy, Walmart, Gamestop, Home Depot, Marshalls, Michaels, and just about any other store you’d need all within a couple miles of each other.

Around Town

Do yourself a favor and explore the local restaurants and bars. There are so many hidden gems around South Lake. Talk with your server, get to know the people around you and make some friends!  

Happy Hour is a great way to drink a beer, find an appetizer or two and save some money. It’s one of the best ways you can explore different places without committing to a whole dinner experience.

Here’s some of my favorite places to hangout or find happy hour:

Coldwater Brewery and Grill

The Hangar

South Lake Brewery

Lake Tahoe Aleworx

Artemis

The Idle Hour

Base Camp Pizza

Frescana’s

Yugen Sushi

Sushi Pier

House-Hack / Find Roommates

If you’re renting, are you in the best spot for you and your family? Is there a cheaper house you could rent while you save money to pay your own mortgage instead of someone else’s? 

If you own, is there a way to increase your monthly income? Maybe you could rent a room out? 

Check out BiggerPockets house hacking guide to get some ideas.

Bottom line: Get out and meet people. Save money where you can, stay local when you can. Find ways to decrease your expenses so you can increase your savings and experiences!

If you have any questions about anything I’ve written, feel free to email me directly at 
ryan@investinlaketahoe.com.

If you’d like to explore your ideas around moving to Tahoe with me personally, give me a call. I’m always around and available to help. My dreams brought me here, and I love helping others anyway I can.

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