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Over the next 2 years we are going to be preparing to go full time on the road for while. We will be traveling with our son who will be 8 or 9 at the time. We are buying a small bunkhouse style trailer for the meantime to take some shorter trips with the ultimate goal of going full time once our older children are mostly independent.
We will sell our house at that point and use the equity to upgrade our truck to a 250/2500 and a bigger full time ready trailer/5th wheel (havent decided yet). We were also going to take the remainder of the equity and put it in a money market that we will be contributing to while we travel with the plan that once we decide where to settle later we will have that money for a house.
But now Im considering buying a vacation rental in our "home state" (the one we will use for our residency) and renting it out as a vacation rental to offset the mortgage. And we will have a place to land if we need to come off the road for any reason, if we need truck or rv repairs or just for holidays. The question is I have no idea where to buy this place.
The #1 places to act as residency states are Texas, Florida and South Dakota. Im leaning toward Florida and Texas as they are good winter refuges too and therefore we can winter there and do maintenance but also have a decent tourist economy.
Does anyone have any thoughts on this? We would be looking to spend around 250k for a 2-3 bedroom home in an area that would attract some vacation renters.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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We own FT rentals in nice places to visit that have differing climates.
Each are rural, view, props with extra cabin, shop and RV hookups for us, whenever we happen to be there.
Tax deductible travel between between homes, fully deductible interest, expenses, + depreciation
= Very easy to offset other income for many excellent reasons... Investment gain, HC subsidy, business costs and profits...
All places have paid for themselves, sometimes more than once. All have significantly escalated in property value. We are starting to sell them off and carry back the loans for steady retirement income. (30% down minimum, skin-in-the-game).
Active retirees make excellent renters. They keep the places nice, do most repairs, pay consistently, aren't 'cry-babies`
We lived overseas while kids were age 6-14, and rentals survived fine (without managers).
We did a 1 yr RTW and rentals did fine.
That said... I prefer commercial income properties, (not housing related). Or bare land... But each has quirks. I would not do vacation rentals (that brings very abusive property users who are huge cry-babies. Management and cleaning fees will eat any profits and a lot more!
All of our props are in income tax free states, and near excellent airports. We keep a cheap minivan at each location (deductible business expense). Sometimes while RVing we like to take diversion trips, so having multiple places to use as homes is handy. All have been very fun and cheap to outfit using thrift stores. Liquidating is very easy, as these properties (with views and multiple housing options are highly desired and sell very fast.) Never need a realtor. All have sold this year in less than a week. Some for cash.
Flying between places at the moment. Which I do often (deductible business expense).
To do over at age 30.... I would have chosen NH, TN, TX, SD, WA and AK and built small homes to rent out with a large (HUGE) shop with apartment + RV site, and not worked another day in my life. We homeschooled and taught our kids how to travel FT (cheap via volunteer), and to design and build rural homes. They each built their own custom designed homes during JR HI, and went to college for free at age 16, with nearly $100k equity and $20k in their Roth IRAs. Just a different priority and thought process than conventional families.
Keep up the open mind, Covid is a perfect opportunity to do as you plan. And very vast learnings for your self and kids.
Last edited by StealthRabbit; 02-09-2021 at 05:44 PM..
We lived overseas while kids were age 6-14, and rentals survived fine (without managers).
We did a 1 yr RTW and rentals did fine.
That said... I prefer commercial income properties, (not housing related). Or bare land... But each has quirks. I would not do vacation rentals (that brings very abusive property users who are huge cry-babies. Management and cleaning fees will eat any profits and a lot more!
.
The OP specifically said they wanted to do a vacation rental and with a vacation rental, you need someone nearby to manage the property because of the wear and tear.
My family has almost twenty vacation rentals. I understand well how this works.
For a vacation rental you are going to have to pay someone to manage it local.
In Florida, it August when the AC goes out, your renters will not wait until noon Wednesday for the repairman.
What about when your maid service doesn't clean worth a rip?
You can't just put a rental on the market and set out traveling.
Youre right about the management perspective. I would 100% hire a property management company or, in the case that I buy in FL, my mother in law would do the cleaning and such and I would pay her. We wouldnt be unreachable just not local which doesnt change much about calling an A/C guy. My aunt in law is also a real estate agent in FL and can help too. I dont think its easy but I dont think I need to be within 5 miles in order to call for repairs or hire a cleaning professional.
Quote:
Originally Posted by StealthRabbit
We own FT rentals in nice places to visit that have differing climates.
Each are rural, view, props with extra cabin, shop and RV hookups for us, whenever we happen to be there.
Tax deductible travel between between homes, fully deductible interest, expenses, + depreciation
= Very easy to offset other income for many excellent reasons... Investment gain, HC subsidy, business costs and profits...
All places have paid for themselves, sometimes more than once. All have significantly escalated in property value. We are starting to sell them off and carry back the loans for steady retirement income. (30% down minimum, skin-in-the-game).
Active retirees make excellent renters. They keep the places nice, do most repairs, pay consistently, aren't 'cry-babies`
We lived overseas while kids were age 6-14, and rentals survived fine (without managers).
We did a 1 yr RTW and rentals did fine.
That said... I prefer commercial income properties, (not housing related). Or bare land... But each has quirks. I would not do vacation rentals (that brings very abusive property users who are huge cry-babies. Management and cleaning fees will eat any profits and a lot more!
All of our props are in income tax free states, and near excellent airports. We keep a cheap minivan at each location (deductible business expense). Sometimes while RVing we like to take diversion trips, so having multiple places to use as homes is handy. All have been very fun and cheap to outfit using thrift stores. Liquidating is very easy, as these properties (with views and multiple housing options are highly desired and sell very fast.) Never need a realtor. All have sold this year in less than a week. Some for cash.
Flying between places at the moment. Which I do often (deductible business expense).
To do over at age 30.... I would have chosen NH, TN, TX, SD, WA and AK and built small homes to rent out with a large (HUGE) shop with apartment + RV site, and not worked another day in my life. We homeschooled and taught our kids how to travel FT (cheap via volunteer), and to design and build rural homes. They each built their own custom designed homes during JR HI, and went to college for free at age 16, with nearly $100k equity and $20k in their Roth IRAs. Just a different priority and thought process than conventional families.
Keep up the open mind, Covid is a perfect opportunity to do as you plan. And very vast learnings for your self and kids.
I am so excited for the possibility of not being tied to 1 place. We live in NJ and I hate it. I am a restless spirit and going kind of crazy, especially being trapped with COVID. One thing for sure is I want a place that has at least electrical and water for my RV so that when we stop there we can park in the driveway.
I am already in the beginning stages of planning our first trip, I want to do a history road trip. Williamsburg, Jamestown and Cherokee for early American/Native history. Then New England for revolutionary history then follow the revolution through Philadelphia, Washington DC and NC and see battlegrounds and the Constitution and teach my child the things you cant learn in school
You can't just put a rental on the market and set out traveling.
That is exactly what I did. We are coming up to 5 years on the road. I have traditional rental properties, not vacation properties. Local property management takes care of the day to day issues. The OPs original idea may have to be modified a bit.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,742 posts, read 58,090,525 times
Reputation: 46231
Quote:
Originally Posted by Monello
That is exactly what I did. We are coming up to 5 years on the road. I have traditional rental properties, not vacation properties. Local property management takes care of the day to day issues. The OPs original idea may have to be modified a bit.
Thx, it's always good to provide some options, choices, and details for op.
Several family have Vacation rentals that they leave in the hands of managers and they do fine in popular areas (Gulf coast, TN mtns, Hawaii, Oregon Coast, Canada Islands, San Diego, Malibu, Santa Barbara)
I just don't like running a lot of people through the home (wear and tear and security) and parties (Liability and damage and strife with FT neighbors), and expected use of beach supplies (losing them ). + all maint and repairs done by manager's choice and added % fees for doing that. + fees for rental and cleaning. AND I have often ended up re-repairing stuff at ST rentals that management company had done.
+ for FT RV, it is nice to have a place to store your stuff, and to come home if needed or desired. Each of our places have multiple living spaces with separate entrances, driveways, and shops / storage + RV hookups for self or friends. These are all rural (not in subdivisions). Several friends and relatives do similar with older city properties with alleyway access. We stay with friends in CO, SD, MT, UT, WV, TN, GA, AL who all have separate living spaces and RV spots at their 'city' homes. The situation I really like is friends on Vancouver Island who have a very pretty farm on the beach / coast with a 40x 60 shop and beautiful view 2400sf apartment above. FT RV'rs rent it for $400 / month yr round and come every summer and help grow a huge garden and care for livestock, so our friends can travel in summer with their family. They also have agreement that guests can use either home when empty. We have shared our home with international travelers for over 30 yrs and it has been a very rich experience. We visit them when we travel internationally, and we also 'Farm-sit' for elderly or people who have to leave the farms temporarily for medical or eldercare reasons. Win:win.
BTW: investor friends who have both LT and ST rentals claim the net income is about equal, due to the high expenses of supporting vacation rentals. With Air B&B and WFH options, I am sure vacation rentals can win in current market, but it is not worth the extra insurance / liability, repair, cleaning, vacancies, management, Utilities, wear and abuse of property, and security risk to me.
YMMV,
Maybe Blue Heron can elaborate on net profits of 20+ vacation rentals. (as a benchmark for OP)
I average 12% net on rental income plus 7-12% annual appreciation on my LT rentals in desirable USA vacation locations. While I don't have to show up at any of the locations, since I'm retired ) I usually make the rounds at least every 3 months for a few weeks at each location, depending on needs and events and weather. I love to fly, so going between locations is fun for me, not an effort. We have church and community volunteer commitments in each location, so stay engaged with communities and tenants. Our LT tenants often thank us for letting them live in beautiful homes, and we are glad to share that blessing with them (and they in turn take very good care of the properties). None have ever complained
Maybe thats a better option, ill need to do some research. Perhaps a 2 family type situation so that the renters pay for it and we have a small.place to store things. Long term. Hmmm thanks for some different perspective
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). + all maint and repairs done by manager's choice and added % fees for doing that. + fees for rental and cleaning. AND I have often ended up re-repairing stuff at ST rentals that management company had done. 
