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Beach house short term summer rental Income account
Old 09-24-2021, 08:04 AM   #1
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Beach house short term summer rental Income account

Hi all,

We own a beach house as a second home and it brings in about $60k/year in income - about $50k after management fees.

I currently keep all the income in a savings account, but I've started thinking what other options I could explore that would generate a little higher yield, but I could tap into the account every month or two to pay the mortgage?

Maybe a Fidelity GNMA fund? Or some other high yield bond fund?

Any recommendations?

THANKS!
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Old 09-24-2021, 08:40 AM   #2
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I would invest it wherever your desired asset allocation needs augmented. Or, If it's the beach house mortgage you mention, I would probably use it all to pay off that mortgage.
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Old 09-24-2021, 08:48 AM   #3
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If you can stomach a little more credit risk you could put the savings in something like GM RightNotes (currently 1.5%) or Toyota IncomeDriver Notes (currently 1.35%) or Dominion Energy Reliability Investment Notes (currently 1.25% for $50k).

These operate similatr to an online savings account... you can deposit or withdraw money at any time and they credit interest monthly.

If you want to get greedier you could look into NUSI.
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Old 09-24-2021, 09:01 AM   #4
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Quote:
Originally Posted by PaunchyPirate View Post
I would invest it wherever your desired asset allocation needs augmented. Or, If it's the beach house mortgage you mention, I would probably use it all to pay off that mortgage.
That's not a bad idea right there.

Basically, April - Sep is where I get all the income for the next 6-7 months, so you're right, it might be best going ahead and paying the mortgage. My rate is 2.87% which is really good, but it would hurt to pay it ahead of schedule.

Thanks for the tip.
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Old 09-24-2021, 09:35 AM   #5
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Quote:
Originally Posted by moneymaker View Post
That's not a bad idea right there.



Basically, April - Sep is where I get all the income for the next 6-7 months, so you're right, it might be best going ahead and paying the mortgage. My rate is 2.87% which is really good, but it would hurt to pay it ahead of schedule.



Thanks for the tip.

Keep a cushion for repairs and maintenance. Ally pays .5% which is better than nothing.
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Old 10-20-2021, 08:50 AM   #6
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Quote:
Originally Posted by moneymaker View Post
That's not a bad idea right there.

Basically, April - Sep is where I get all the income for the next 6-7 months, so you're right, it might be best going ahead and paying the mortgage. My rate is 2.87% which is really good, but it would hurt to pay it ahead of schedule.

Thanks for the tip.
Man, what area is this beach house? I assume it's oceanfront and 4 beds+.

I'd keep 12 months of expenses in a high yield savings and the rest for another beach house or solid dividend stocks.
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Old 10-20-2021, 08:57 AM   #7
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Man, what area is this beach house? I assume it's oceanfront and 4 beds+.

I'd keep 12 months of expenses in a high yield savings and the rest for another beach house or solid dividend stocks.

In a high demand area that rents by the week or weekend this can happen. It's good for the owner and the renter....


The management fees seem low from what I can see...good on him for finding a good deal.
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