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I have no idea what people with (any) money do with it, but mine is earning .25% in the bank, and I'm tired of it! Don't trust the stock market and am not much of a risk-taker. Real estate seems to me the safest investment, but I know from experience that being a landlord is a pain in the rear! Am looking for the best type of and location for a vacation rental; one that will do well in peak season and that I could use for retreats in the down time (assuming there is one). Beach, mountain, or city? Where and what?
1. Buy where you know. Vacation renters will ask where is the best place to rent skis or a boat or your favorite pizza joint.
2. Visit this place often.
3. Know local rental rules -
4. Are you going to rent weekly, seasonally?
5, Know good contractors.
Last edited by 2bindenver; 12-11-2014 at 04:53 PM..
Am looking for the best type of and location for a vacation rental...
They're called hotels and resorts.
Best thing? A different one for every season or change in mood.
Quote:
I have no idea what people with (any) money do with it, but mine is earning .25% in the bank,
and I'm tired of it! Real estate seems to me the safest investment, but I know from experience that
being a landlord is a pain in the rear!
And? You still want to do it? Stick close to home.
Then the call to clear a drain or argue over a bounced or missing rent payment
can be done conveniently on the way home from your regular job.
As a decades long real estate investment broker, there are a few questions you need to answer before any knowledgeable person can answer that question.
1: How long do you plan on holding the investment?
2: How much money do you have to invest?
3: Do you need cash flow or liquidity from your investment?
4: As you want to invest in resort areas, are you prepared in recessionary times when the tourist traffic greatly slows down and you may have to pay some of the mortgage payments and even some of the expenses out of your pocket, do you have extra cash available to do so? I have seen people get into real trouble during these times, as there is no guarantee that the people will be wanting your property all the tourist season every year.
5: Are you aware if you get in to financial binds as in #4 above, that you cannot always just put your property on the market and sell it quick and come out financially whole? Tourist area properties then become very difficult to sell in slow times, and can take years to sell unless you are willing to take a financial loss considerably below your purchase price in many situations.
I don't know much about investments or real estate yet, but my grandmother is 85 and she's been managing property for over 50 years and still going strong. She's in a duplex and even owned a beauty shop below the garage apartment unit. She advised me as someone once advised her, "If you have property, you never have to pay rent again. She said collecting rent from her units has paid her mortgage and some.
I have no idea what people with (any) money do with it, but mine is earning .25% in the bank, and I'm tired of it! Don't trust the stock market and am not much of a risk-taker. Real estate seems to me the safest investment, but I know from experience that being a landlord is a pain in the rear! Am looking for the best type of and location for a vacation rental; one that will do well in peak season and that I could use for retreats in the down time (assuming there is one). Beach, mountain, or city? Where and what?
My understanding from several friends who own vacation rental properties on the Carolina beaches is that it has not turned out to be the financial boon they thought it would be. Rental income has not been what they were led to believe. Repair costs have been much higher. Apparently, salt water does a number of on air conditioners, paint, etc. and temporary tenants take their toll.
tThose who buy duplexes and triplexes, fix them up, and rent them out seem to be doing better.
I just got rid of a local duplex (thank goodness), but am looking for an investment at least as far away as the nearby big city, as the tenants in this small town have gotten nightmarish in recent years. My plan -- whether it's an hour away or five states away -- is to hire a property manager, which may be yet another nightmare waiting to happen! Have had my fill of dealing with tenants personally, and I'm not handy (am a woman, and a fairly helpless one when it comes to repairs).
I plan to relocate one day, but haven't decided where yet; ideally, I'd figure that out and buy a place there to rent out and use occasionally now and retire to eventually. Am pretty flexible, but can't nail down where I would get the most bang for my buck. It would be an all-cash purchase.
Although I initially dreamed of a beach house, I think I'm getting the message re: hurricane insurance, wear-and-tear, etc. Again, any big city, beach, mountains. Anything but the bank!
I've heard also of REITs; how do they work, and DO they work?
Location: When you take flak it means you are on target
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The rental property that pays off is usually lower income, hence tenant problems. A million dollar vacation home doesn't rent for enough to offset the money in other investments.
A condo might work for Outtahere by reducing your maintenance. But really run your numbers over a ten year period. HOA, ins, repair, taxes often eat up condo equity.
Here's a cookie cutter way to make money in RE, if you are handy. Buy in tract areas. Buy at the low end of the market, do a cosmetic upgrade and resell at the high end of the local sales. Rinse and repeat. Just don't miscalculate your repair costs, the margins are slim. This way you know going in almost to the dollar what your return will be and you don't have to deal with tenants.
Once upon a time I too felt that real estate was "easier to understand" than other investments.
It is mostly a lack of any two stock brokers having the same "outlook" for most any sector / fund / stock.
I learned, slowly, that those things do not matter. OVER TIME there is really no way to beat the market SO what you have to do is find a sufficient way to make your overall "basket" of investment behave like "the market" or just get an ETF that IS made up of the SP 500 -- boring but hard to beat: https://advisors.vanguard.com/VGApp/..._id=2014magVOO
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