Exposing The Truth About Vacation Homes and Real Estate Investing
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- Опубликовано: 17 окт 2024
- Here is everything you need to know before you purchase a vacation home or start investing in real estate! A good property investment is hard to find and rental properties may now be the best option for you! Make sure to subscribe to the channel to stay up to date with this series and use #AskTheMoney on any social platform to ask your questions!
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Great advice guys! I never owned a vacation rental, but I did own a rental house and a tri-plex on a couple of occasions. I will never do this again, as the act of dealing with renters is not easy. If you're lucky, you'll get someone who'll treat your property as if it were their own. But in the vast majority of cases, I found renters hard to deal with and abusive to my property. I'd much rather invest my money in the market and buy securities. I can buy & sell with the click of a mouse, and I don't have to fix toilets at 3am or try to collect rent from deadbeats.
Thanks Roger!
Roger not sure if I agreee with you on this. No doubt rentals are tough. But I own 2 and have made a lot of passive income. I also love the tax advantages of rental income. However, I am not a fan of receiving a call about a leaking toilet in the middle of the night. Lol
Omar Shahid this is what I want to do when I get older and stuff any tips u could give?
@@oshahid1983 hows the taxes? since this is a 2nd income
@@dupax5053 Taxes are minimal cause you can deduct interest, insurance, maintenance, prop taxes, and depreciation....So it is awesome, you pay very little tax. Huge advantage of real estate vs stocks. The problem is that you are very active vs stocks.
I LOVE my vacation home. I got an excellent price on it, though. Plus four lots basically free. Timing is everything. It is surrounded by pines and oaks, and I enjoy taking care of it. It is only sixty miles from my Cottage. Run the numbers. I swim in the lake, bike and hike there.
Fun part is everyone talking against vacation homes are actually owning one.
Driving up to the Beaver Creek Ski Resort there’s beautiful homes along the golf course, many were purchased for $1M ten years ago. These homes today are now worth over $3M. The families that enjoyed them were paid $200K a year to enjoy them. (1M - 3M = 2M) 2M / 10yrs = 200K.
Own a vacation rental property. Everything these two say is correct as far as it being a headache. IF YOU THINK OF IT AS YOUR HOME. Get it in your thick head that it is a business. Treat it as you would an active business. Hire management and maintenance pros that you research just like any other employee/contractor. If you do, it can be very lucrative for those people who already have their finances and retirement plans in order. It is for me. It should, however, be last on the order of things to invest in.
I disagree, if you like what your doing it doesn’t feel like a job be self motivated do not be lazy don’t be afraid to get your hands dirty focus and stay on top of things it’s good to be aware shit breaks but be smart about it and don’t let this video be discouraging
Thanks. I was on the verge of buying a vacation home we and our two grown kids families could use at a beach we've loved for over 30 years. No renting and I can easily afford it, but still, I understand now. I'm convinced. You guys probably just saved me at least $500K. It'll fund some nice vacations now and the rest will go into our burgeoning long term care savings.
You learn pretty quickly that there is an embedded cartel of real estate agents and property managers that feed off of vacation home owners. In the popular areas by the time you get through with insurance, management and hoa fees you'll never come out ahead. And that's if you pay cash!
The price of vacation properties seem to swing widely based on the economy. People splurge when the economy is doing well and when times get tough luxury items like expensive cars and beach houses are some of the first things to go, even if it means taking a loss on the value, people just want to rid themselves of the maintenance, HOA fees, etc...
No doubt, that is why the money is made at purchase 👍
So glad that I came across this page! I recently transitioned out of the Army and am now a Financial Advisor. I really enjoy getting your perspective on these types of topics. Keep up the great work!
Thanks Justin!
I’ve been day dreaming all days and this vid got me back to earth, reality is sad, not everyone can afford a vacation property
Good. But must you do this while driving?
Beaches are tough to profit from vs. other investments, but I have to disagree on NC and TN mountain homes. Purchase prices are low vs. the income they generate. My NC cabin generates more cash than I know what to do with.
I agree, I have two properties in Colorado and they are both performing well.
@@inacoma001 where are they located? What was your cost vs. income?
#AskTheMoney I have a condo in San Diego, CA that is currently being rented out because I moved to Georgia, and it is cash flow positive and has also appreciated in value. If I sell it, what are your thoughts on re-investing the money into another rental property in the Atlanta, GA area vs putting the money in the stock market?
Thanks for submitting your question rwgupta!
Yes reinvest in your current city, it makes the distance from the rental easier to manage.
While I really appreciate the advice, you guys did not answer the question of "when should I think about financing a vacation property" other than to say "don't do it". If rental homes weren't worth it then markets would be flooded with vacation properties for sale and that doesn't seem to be the case in the area I take vacations each year. If I have 20k in cash I'm probably not ready. If I have 50k, would that be enough to start looking? There are lake front homes for sale under 200k but those are smaller than I'd prefer so probably not. Even finding out the process for purchasing a 2nd home seems pretty difficult to do. Just gonna keep looking to see if RUclips has any other info on this topic.
In my opinion, im not a fan of a vacation property, because i don't want to go to the same place repetitively. & its maintenance whether or not you're there. & are you gonna be renting it out when you aren't using it, that'll offset the cost.
@@ericworthington7299 And from my perspective, I DO want to go to the same place repetitively. I also like the idea of a VRBO or AirBnB kinda place, where you can at least return some of your cost by letting others rent your place. But a big negative is that the weekends you'd probably want to go (i.e July 4) would probably coincide with the best chances at making money so you'd probably have to mostly go in the off-season. There are definitely pros and cons.
@@joshualawson7604 ok & yes agreed, that's possibly the only downside/ upside, is to make the most money from it, by like u said renting it out on the weekends & holidays, but you have to used it on the non booked days.
Thank you for a great advice. I thought about the points that you mentioned and afraid to buy a second house. We have no skill to fix our house. Thanks again.
@6:47 Brian gave him the look like " you talk to my wife?"
Thais is so spot on LOL. I have two vacation rentals. My latest fiasco was bed bugs. Thank goodness I had coverage. However, the heat treatment ruined the new vinyl floors. Once again, Ins covered it. But, the stress of that is NOT worth it. Not to
Mention the pool is now considered a commercial pool. my shiny big gold pineapple- stolen. Little kid pissed on the wall once.
Stripper cards and feathers and a bathroom full of vomit - check.
Amanda,
Thank you for sharing. The reality of owning a vacation rental is quite different than what the dream would have you believe (unicorns and rainbows).
Sometimes you want that chocolate pudding... Unless the vanilla pudding is in the rocky mountains in Colorado and your vanilla pudding is perfect 😁
My exact experience... for years
Any info on investing in a campsite location on a lake island?
Great information. The key is executing and taking action. Too many people watch and do little to nothing with the information.
Very good advice - you just saved my retirement savings. Subscribed.
Guys!!!! Thank you so much for showing my question/comment that I sent you. That is soo cool. I showed my wife and she didn’t believe me at first. Lol. Loved the video guys keep up the great work!!!!
Thanks Omar!
The upkeep is sooo expensive w vacation rentals- stuff just breaks more often
My grandmother always wondered why tenants make holes in the walls. I've never made a hole in the dry-wall/plaster myself, but somehow every tenant always left with holes.
Probably Drunk and can't holed there liquor.
You just crushed my dreams lol
Better to know on the front end 👍
😢
@@anniealexander9616 In life there are challenges and hardship. Do not let that crush your dream. Be strong you can make it work. This is coming from someone who has a vacation rental business and there were a few tough year. Get through it...it is part of the journey. The journey is worth more than the destination.
I missed an opportunity in 2008 coulda bought lake house for $150,000 same place is now selling for $375,000 same house.
@@spunky181 A house near me sold for $19k in 08. It's listed now for $242k. It's unbelievable.
Rock solid and concise advice. Subscribing.
Excellent educational video on vocational homes... It helped me a lot on my final decision.
I did not consider that I may need to get a crane to replace the air conditioner. Thanks for this video. I will look into that before I submit an offer on a high-rise condo I was about to buy in Daytona Beach. Phew.
Ha! First Yet Again!! Thanks 🙏 Again for the info! 🎸🎶🔥👍🏻
awesome advice guys! Keep up the great content!
Thanks Timothy! We appreciate it.
My vacation home would soon be my primary residence.
What type of homes are good for renting? Smaller row homes in say a city like Baltimore?
We covered this question in our show on passive income. There is no specific right answer. Depends on multiple factors including your skills/handiness and access to capital.
Alex are you near Baltimore? I'd be happy to help you find something if you are.
You need an armored car to drive through some parts of Baltimore city 😂😂😂
Dont buy!! Better invest in rentals near you and travel with profit wherever you want in the world!!!
How are you going to buy a vacation property when you only own one property. No one can afford that. Buy rentals 1st then get the vacation.
10% down vacation home loan
We’re selling it!!!!
How much did you profit?
Wow how negative can u be ?
This video just downs the idea of buying a investment home. Save time and skip it.
Buzz Kill, but not necessarily true!
This guy is a Debbie downer
Don’t let this video discourage you from purchasing a vacation rental. I agree with most of what the Money Guys say, however their reasoning in this video isn’t very valid, especially in a historically strong vacation rental market.
To further elaborate- A Tesla is a worse investment than a short term vacation rental. Using your 3 criteria:
1. It locks you down. You feel like you have to drive around in it all day because you overpaid for a car. You have to do videos, phone calls, zoom meetings, etc in it all day. Heck, you probably feel the need to sleep in it. I’m convinced you would shower in it if you could.
2. It is not cheap. Not sure exactly how much your Tesla was but I’d venture to guess it was more than my Honda. Real estate generally appreciates. Cars ALWAYS depreciate.
3. Is the car an investment or personal use? What the ROI of a Tesla? It’s not an investment because it’s not making you money.
Jon,
I appreciate the humor of what you did, but don’t confuse a use asset with that of of an investment. My Tesla is paid for... you will be using leverage (debt) to accomplish your vacation rental goal so I stand by the content of my video 👍
@@MoneyGuyShow as the rich dad says an asset is something that puts money in your pocket, rentals do that if you know how to manage, and it's much more stable than the stock market which is heavily manipulated. There's a reason the richest people in the world are in real estate or at least buy it to hedge
Poor advice. This video provided all the cons of purchasing a vacation rental. There are so many positives to investing in one. Be smart, get what you want, and yes, work is involved! Pros- make money, own a piece of prime real estate gaining value, and a vacation spot to make memories. Good luck and don’t let videos like this scare you. You can do anything you set your mind to and create the life you want.
The big thing it misses is the money saved on not having to spend on a hotel room, and the cash on cash ROI possible if you buy the right rental in the right location. I'm sure most who have vacation rentals in say Orlando for example would disagree with the opinion on this video