Own two houses?
- Thread starter Rich_by_the_Bay
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gtmeouttahere
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Well, If you buy a 2nd home in a tourist area that is furnished you could rent it by the day, week, or month that you're not living there. Either advertise on the web or through a realty or property management co. It can actually be quite profitable as renting for 1-2 weeks per month could actually pay the mortgage and anything more would be profit. Just allocate the time that you would be spending there and the rest is rentable time.
I know people that do this and make a really good profit, also help pay for their vacations. Thought about doing it myself just haven't jumped at it yet. I would probably buy a condo but houses rent for top dollar to big families who want a gathering place and do not want to stay in a hotel.
I know they rent well because we stay in houses like this on our vacations and they are almost always booked. They can rent from anywhere to $800-2500 dollars a week depending on the size and location. Some people can make a killing doing this if they buy close to, or in a resort type community.
I know people that do this and make a really good profit, also help pay for their vacations. Thought about doing it myself just haven't jumped at it yet. I would probably buy a condo but houses rent for top dollar to big families who want a gathering place and do not want to stay in a hotel.
I know they rent well because we stay in houses like this on our vacations and they are almost always booked. They can rent from anywhere to $800-2500 dollars a week depending on the size and location. Some people can make a killing doing this if they buy close to, or in a resort type community.
Lancelot
Full time employment: Posting here.
My situation is not an exact comparrison to the OP question about owning two houses, but, for me, I love the freedom of renting and being able to move on whenever I want.
In a former life, I always owned a house and looking back, I can't belive how much time I spent maintaining and improving my properties...
Now I lounge by the swimming pool, peruse a Lonely Planet and plan my next trip.
Works for me
In a former life, I always owned a house and looking back, I can't belive how much time I spent maintaining and improving my properties...
Now I lounge by the swimming pool, peruse a Lonely Planet and plan my next trip.
Works for me
brewer12345
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Nords said:
Man, talk about a soft pitch! I am going to let that one go...
wallygator69
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Rich_in_Tampa said:
Hi folks,
Rather than use a hotel, I have had great luck using VRBO.com. Vacation rentals by owner. I've rented houses near Disney, Vegas and Myrtle Beach. In Myrtle I rented a 3 bedroom 3 bath house with ocean views for $750.00 a week. The same house through one realtor was $1250.00 and another was $1450.00. A decent hotel in Myrtle is over $100.00 a night and we had several guest come down for a few days...
We had to go to Vegas for a wedding last year and I rented a 5 bedroom 4 bath house with swimming pool, 6 man hot tub and a game room with pool table. It was about $1350 a week but with 5 couples it ends up costing about $25.00 a person per night. It was like life styles of the rich and famous, or drunk and stupid, actually a little of both....
Good Luck.
Wally
gtmeouttahere
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That's been our experience. It's good cheap fun!!!
tryan
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Perhaps the question for all the 2 home owners is this ...
Would you have kept the second home if appreciation was at or below inflation for 5 years ?
I would not buy a second home expecting appreciation anywhere near what we've seen in the last 5 years. Going forward I'ld bet on something closer to inflation.
That being said, we're building on waterfront land I 've been sitting on for years. Will do the vacation rental thing when we're not in it (working of course). The thought of buying "everything" again has been painful ... but given the appreciation we've seen over the last 5 years, we'ld get it all back (and then some).
Would you have kept the second home if appreciation was at or below inflation for 5 years ?
I would not buy a second home expecting appreciation anywhere near what we've seen in the last 5 years. Going forward I'ld bet on something closer to inflation.
That being said, we're building on waterfront land I 've been sitting on for years. Will do the vacation rental thing when we're not in it (working of course). The thought of buying "everything" again has been painful ... but given the appreciation we've seen over the last 5 years, we'ld get it all back (and then some).
wabmester
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tryan said:
That was certainly a factor for us selling our second home. That and the capital gains exemption we were able to use by making our first home into our second home. It's hard for me to imagine real estate appreciating much more over the next 5 years, but I think I said the same thing about tech stocks in 1995.
Anyway, now that we've sold our second home, I finally understand the downside.
Not only do you have to buy two of everything when you have a second home, but when you sell, you need to get rid of all the redundant cr@p! What a pain. There's only one thing I hate more than moving, and that is selling and giving away stuff while I'm moving. And you wouldn't believe how flakey craigslist buyers are -- I think about 75% of the buyers never show.
OK, I feel better now. End of rant.
The other 25% live near me, and they never show either.wab said:
What amazes me is the guy who calls for directions, turns out to be only three miles away, says they'll be there in 10 minutes, and never shows up. Should I file a missing-persons report?
Same with potential tenants. Greg would tell them about the place, they would want to look, and a good percentage would never show up.
I think some people never were taught manners: it is polite to call if your aren't going to show.
I think some people can't say "no" to save their lives, so they never were interested but committ themselves to looking nevertheless.
I think some people never were taught manners: it is polite to call if your aren't going to show.
I think some people can't say "no" to save their lives, so they never were interested but committ themselves to looking nevertheless.
Our second home is a condo in Florida. Prior to buying the condo I ran all kinds of numbers and scenarios; keeping it strictly as a vacation home, renting it out year-round versus seasonal, tax implications, buying a single family home vs a condo...
I purchased the condo 3 yeas ago even though no scenario showed a positive cash flow. A lot of it had to do with the tanking of the stock market and the my belief that real estate would be a safer investment at the time. My wife and I had been looking at shore property in Ocean City and on the eastern shore of Maryland. But you can't touch anything decent for under $400,000. We purchased a condo in a upscale and gated community on Charlotte Harbor. The unit was 1/4 of what we would have paid down the shore and you can still go the beach and fish during the winter months. The downside is we're 1100 miles away versus 150, and don't get to use it nearly as often that we would like. But it is very nice wearing flip flops and t-shirts in January.
We decided to rent it seasonly vs annually because we could generate between 60-70% in the income (compared to renting it annually) and have much less wear and tear. Our plan is to rent the condo until we retire and then use it as snowbirds in the winter months.
14 months after buying the condo, Charley and Francis hit the west coast and we were ground zero. The unit sustained significant damage as did the entire complex. Since then the entire place has been rebuilt and is brand new. There certainly was a great deal of stress, a lot of work and some expense. I'm one of the lucky one's where my insurance covered a majority of the damage.
The question is would I do it today. The answer probably not. Real Estate pricing in southwest Floridia has increased almost 100% in less than 3 years. Having to carry twice the mortgage payment, if I purchased it today would not be doable.
I really think our decision to purchase was well thought out, but I never would have expected the appreciation in the property values.
If your looking a purchasing a 2nd home -- 1) make sure you have some disposable income. 2) Have a financial plan, if you have to struggle every month to make the mortgage payment or condo fee it's not worth it. 3) Have some reserves in case the unexpected happens -- you or your wife gets sick, there is storm damage.... 4) You have to be more diligent given the inflated property values. 5) be aware if you're purchasing this for the tax savings, you begin to lose the benefits as your income exceeds $100,000. You can carry up to a 25,000 loss, but for every $2,000.00 above the $100,000 threshold, the benefit is reduced $1,000.00 -- so if your income is over $150,000, you get zero benefit -- although you can still deduct interest and taxes.
I've been extremely lucky with this property, it certainly was a lot more luck than skill. Timing was everything.
In a few years when I retire, the condo will become our primary residence and our second home will more than likely will be a sailboat. We'll spend the summers with the the grandchildern and dock at a nearby marina. At least that's my plan -- my wife can join me if she wants.
dwk
I purchased the condo 3 yeas ago even though no scenario showed a positive cash flow. A lot of it had to do with the tanking of the stock market and the my belief that real estate would be a safer investment at the time. My wife and I had been looking at shore property in Ocean City and on the eastern shore of Maryland. But you can't touch anything decent for under $400,000. We purchased a condo in a upscale and gated community on Charlotte Harbor. The unit was 1/4 of what we would have paid down the shore and you can still go the beach and fish during the winter months. The downside is we're 1100 miles away versus 150, and don't get to use it nearly as often that we would like. But it is very nice wearing flip flops and t-shirts in January.
We decided to rent it seasonly vs annually because we could generate between 60-70% in the income (compared to renting it annually) and have much less wear and tear. Our plan is to rent the condo until we retire and then use it as snowbirds in the winter months.
14 months after buying the condo, Charley and Francis hit the west coast and we were ground zero. The unit sustained significant damage as did the entire complex. Since then the entire place has been rebuilt and is brand new. There certainly was a great deal of stress, a lot of work and some expense. I'm one of the lucky one's where my insurance covered a majority of the damage.
The question is would I do it today. The answer probably not. Real Estate pricing in southwest Floridia has increased almost 100% in less than 3 years. Having to carry twice the mortgage payment, if I purchased it today would not be doable.
I really think our decision to purchase was well thought out, but I never would have expected the appreciation in the property values.
If your looking a purchasing a 2nd home -- 1) make sure you have some disposable income. 2) Have a financial plan, if you have to struggle every month to make the mortgage payment or condo fee it's not worth it. 3) Have some reserves in case the unexpected happens -- you or your wife gets sick, there is storm damage.... 4) You have to be more diligent given the inflated property values. 5) be aware if you're purchasing this for the tax savings, you begin to lose the benefits as your income exceeds $100,000. You can carry up to a 25,000 loss, but for every $2,000.00 above the $100,000 threshold, the benefit is reduced $1,000.00 -- so if your income is over $150,000, you get zero benefit -- although you can still deduct interest and taxes.
I've been extremely lucky with this property, it certainly was a lot more luck than skill. Timing was everything.
In a few years when I retire, the condo will become our primary residence and our second home will more than likely will be a sailboat. We'll spend the summers with the the grandchildern and dock at a nearby marina. At least that's my plan -- my wife can join me if she wants.
dwk
For those 55 and older, one possibility is to buy into a retirement community, while maintaining a second home elsewhere. Here in the Santa Barbara area where housing prices are high, you can buy into a retirement community for much less than a condo would cost.
One of the nicest such commnities is in a grand old estate in Montecito. Not only do you have a beautiful buildings with beautiful grounds, if you buy in while healthy, you will be cared for regardless of what your future health may be. And given that Julia Child was one of the residents, the food may be pretty good as well. Some residents buy more than one unit and combine them. Condo prices in this area start at over a million dollars. Of course, there is a waiting list.
db
One of the nicest such commnities is in a grand old estate in Montecito. Not only do you have a beautiful buildings with beautiful grounds, if you buy in while healthy, you will be cared for regardless of what your future health may be. And given that Julia Child was one of the residents, the food may be pretty good as well. Some residents buy more than one unit and combine them. Condo prices in this area start at over a million dollars. Of course, there is a waiting list.
db
tryan
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Yeah, I stopped doing private showings years ago. Now it's shot-gun method ...always put the address in the ad; DO NOT answer the phone for a couple days ... then answer every call I recieved announcing 1 or 2 showing times. Then wait with a stack of aps and interview those who found the place.
Also leave aps out side the house for those who do drive-bys.
Have one house in the S.F. Bay Area and one in the wine country. Own another one is Sacramento.
Love the contrast between the areas. The country place was a great relief when I was in a high pressure job. I set it up so that I could leave the city house on a whim, bring nothing and have a functioning house at the other end.
I used the Sacramento house for a while and now just rent it.
Two or even three of many things are required.
In retrospect, when I bought these places, they were giving them away. Now it is a different story.
No complaints here.
boont
Love the contrast between the areas. The country place was a great relief when I was in a high pressure job. I set it up so that I could leave the city house on a whim, bring nothing and have a functioning house at the other end.
I used the Sacramento house for a while and now just rent it.
Two or even three of many things are required.
In retrospect, when I bought these places, they were giving them away. Now it is a different story.
No complaints here.
boont
