Thinking about a second home in Santa Clara but not sure where to start? You are not alone. Many snowbirds and out-of-area buyers want a simple, reliable playbook that covers costs, rules, and how to manage a property from afar. This guide gives you the essentials you need to budget smart, review HOA rules, choose furnished or unfurnished, set up utilities, and complete virtual tours and remote closings with confidence. Let’s dive in.
Build a second-home budget
Buying a second home comes with carrying costs that are different from a primary residence. In Santa Clara, you should expect higher purchase prices and higher costs of ownership than national averages. A thoughtful budget helps you enjoy the home without surprises.
Key budget items to plan for:
- Mortgage payment
- Second-home loans often require stronger credit and may need larger down payments than primary homes. Investment loans usually carry higher rates and bigger down payments than second-home loans. Confirm current lender rules and rates for your situation.
- Property tax
- In California, base property tax is set under Prop 13. A practical rule of thumb is to plan for about 1.1% to 1.5% of assessed value when you include local assessments and voter-approved measures. Verify the assessed value and any special taxes on the specific property.
- HOA fees and special assessments
- Monthly dues vary by community. Review the association’s budget, reserve study, and any pending special assessments before you buy.
- Insurance
- Premiums depend on value, location, and coverage. Earthquake insurance is separate, and flood coverage may be needed depending on the property. Get quotes early.
- Utilities and services
- Electricity, gas, water, sewer, trash, internet, and landscaping or pool service if applicable. If the home will sit vacant at times, you may keep some services active for climate control and security.
- Property management and routine care
- Long-term rental management fees commonly run about 8% to 12% of monthly rent. Short-term or vacation rental management often ranges about 20% to 35% of gross revenue, plus cleaning and guest services.
- Maintenance reserves and capital costs
- A common rule is to set aside 1% to 3% of the property’s value per year for upkeep and repairs. Adjust for the age and condition of the home.
- Vacancy and turnover
- If you plan to rent, budget for vacancy periods, cleanings, supplies, and turnover costs.
Tax and lending basics
- Your tax treatment depends on use. If you rent part-time, federal rules govern how you allocate expenses, depreciation, and deductibility based on rental vs personal days. If you rent fewer than 15 days per year, certain rental income may be excluded under federal rules. Consult a tax advisor for details.
- Lenders consider your existing debt and may or may not count rental income in qualification. Expect documentation requirements such as income, assets, tax returns, and a power of attorney if needed for remote closing.
- If you are a nonresident owner or eventual seller, you may have withholding obligations. Ask your tax advisor how residency and future sale could affect state and federal taxes.
Understand HOA and rules
If you are buying in a community with an HOA, plan on a careful review. In California, HOA governance follows the Davis-Stirling Common Interest Development Act. Your goal is to confirm how the association operates, how well it is funded, and any rules that affect your use of the property.
Documents to obtain and review:
- CC&Rs, bylaws, and rules and regulations
- Current budget, financial statements, and reserve study
- Board meeting minutes from the last 12 to 24 months
- Insurance coverages and deductibles
- Pending litigation disclosures
- Policies on rentals and short-term rentals
- Guest, parking, pet, and alteration rules
City and county considerations:
- Short-term rental rules and transient occupancy tax can apply. Confirm registration and collection requirements before you advertise a short-term rental.
- Rentals may require safety items like smoke and carbon monoxide detectors, plus occupancy limits or permits. Verify local standards early.
Due diligence checklist
- Full HOA packet and resale certificate
- Written policies for rentals and short-term rentals
- Recent board minutes and any special assessment notices
- Reserve study and latest financial statements
- Clarification on vendor access for maintenance and emergencies
Furnished vs. unfurnished
How you plan to use the home will guide your setup. Think about personal stays, potential long-term tenants, or occasional short-term rental.
Furnished pros:
- Move-in ready for you and guests
- Can support higher nightly rates for short-term rentals
- Easier to market as a vacation-friendly property
Furnished cons:
- Higher upfront cost and ongoing replacement needs
- More wear and potential disputes over items
- Requires contents coverage and inventory tracking
Unfurnished pros:
- Lower upfront cost and simpler insurance needs
- Suits long-term tenants who bring their own furniture
- Less turnover of items and fewer replacements
Unfurnished cons:
- Lower nightly rates for short-term stays
- Less appealing to vacation renters
Insurance and tax notes
- Check that your policy matches your use. Second homes and rentals may need different coverage. Short-term rentals often require specific liability and higher limits. Landlord or add-on policies are common for rental use.
- If you rent the property, furnishings can be depreciated as personal property. If it is purely for personal use, furnishings are not depreciated. Keep records and consult your tax advisor.
Set up utilities remotely
Remote owners benefit from simple, secure account setups. Before closing, verify which services you need and whether accounts can be set up or transferred online.
Practical tips:
- Confirm who must be listed on each account, you or a manager.
- Keep essential services active during vacancies to protect the home. A smart thermostat can help prevent humidity or temperature issues, and minimal lighting can deter intruders.
- Enable online billing and autopay where appropriate. Set account alerts so you catch any unusual spikes in usage.
Remote care and security
Protecting your investment while you are away is just as important as the purchase itself. Build a simple system with trusted people and smart tech.
Options and precautions:
- Property managers
- Long-term rental management typically runs about 8% to 12% of rent. Vacation rental management often runs about 20% to 35% of gross, plus cleaning and guest services.
- House-check services
- Schedule periodic inspections to catch leaks, pests, HVAC problems, or security issues early.
- Maintenance contracts
- Pre-arrange landscaping, pest control, pool service, and HVAC tune-ups. Aim to keep the home turnkey.
- Smart home systems
- Smart locks, cameras where allowed, thermostats, and water-leak sensors reduce in-person trips. Use strong passwords and multi-factor authentication for all devices and accounts.
- Wire-fraud safety
- Always verify wiring instructions with your title or escrow team by phone using known numbers. Be alert for email spoofing.
Virtual tours and closings
You can explore and close on a Santa Clara property from a distance with the right tools and team. Expect a digital-first process with clear options for live support.
What virtual touring can include:
- High-quality photos, 3D tours, floor plans, and pre-recorded walkthroughs
- Live video showings via FaceTime or Zoom where you can ask questions in real time
- Supplemental documentation and scans for added context
Remote closing basics:
- Many title and escrow teams support e-signatures for most documents and deliver disclosures electronically.
- Notarization requirements vary. Some files can close with remote online notarization, others use a mobile notary or require an in-person signing with courier service. Confirm early with your escrow team.
- Wire transfer procedures should follow strict verification. Confirm instructions in writing and by phone using previously verified contact info.
What to expect at closing
- You review documents electronically, then schedule your signing via remote notary, mobile notary, or local office based on what is permitted.
- You send cleared funds by verified wire, then receive final confirmations from escrow.
- Keys or access codes are coordinated after recording, and you receive digital copies of your closing package.
Your remote buyer checklist
Use this short list to stay organized from the first call through closing.
- Government-issued ID for notarization and any lender verification
- Mortgage pre-approval letter, or proof of funds if paying cash
- HOA packet with CC&Rs, rules, budget, reserve study, and recent minutes
- Seller disclosures, inspection reports, preliminary title report
- Recent utility statements and property tax information
- Reliable internet, a device for video calls, and e-sign capability
- Time-zone plan for live tours, document reviews, and signings
- Short list of local providers you might pre-engage: property manager, housekeeper, landscaper, emergency plumber or electrician
Next steps
Buying a second home can be simple when you know the steps, budget early, and set up the right support. If you want help reviewing listings, vetting HOA rules, or arranging a virtual tour and remote closing, you can get a clear plan tailored to how you intend to use the property.
Ready to talk through next steps and set up a remote strategy that fits your timeline and budget? Schedule a quick consult with Holly Gardner to review properties, request HOA documents, and plan your virtual tours and closing logistics.
FAQs
Can non-residents buy a second home in Santa Clara?
- Yes. Nonresidents can purchase property. Tax, withholding, and financing rules can differ, so speak with a lender and tax advisor early.
Will my HOA let me rent the home when I am away?
- It depends. Many HOAs limit rentals or short-term stays. Review CC&Rs and written rental policies, and verify city or county rules before you buy.
Should I furnish my second home or leave it empty?
- Match the setup to your use. Furnished is convenient for personal stays and short-term rentals. Unfurnished is common for long-term tenants and simpler ownership.
Can I close on a Santa Clara home remotely?
- Often yes. Many documents can be e-signed. Notarization may be remote, via mobile notary, or in person with a courier. Confirm options with your escrow team.
Who handles the property when I am not there?
- You can hire a long-term or vacation rental manager, use a house-check service, or combine both. Fees and service levels vary, so get references and contracts in writing.
