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re: Vacation home as an investment
Posted on 2/9/22 at 10:40 pm to blueboxer1119
Posted on 2/9/22 at 10:40 pm to blueboxer1119
The party might be about to end. Last year was the largest increase, 20% in the history of the Housing Price Index. I live in the panhandle of FL, and our area has experienced a much larger increase. I would not buy as an investment at this point, but if you love traveling there, and hope to keep it for years, I would buy it for lifestyle considerations and not the best use of money.
1
Posted on 2/10/22 at 2:23 am to Fbohn1
Blue Ridge , Ga so no skiing here but great place anyway. I’d love to get a ski home, but I think I might sit out for a while since I’m so busy
Posted on 2/10/22 at 5:01 am to Fbohn1
Taos and Angel Fire look like undervalued mountain/ski areas.
Posted on 2/10/22 at 9:27 am to blueboxer1119
Gatlinburg has a better ROI than the beach according to a client.
Posted on 2/10/22 at 1:53 pm to SalE
quote:
Gatlinburg has a better ROI than the beach according to a client.
I haven't looked but I wouldn't doubt that due to prices on the beach being crazy right now, but Gatlinburg isn't a soft market either.
The beach really isn't a "seasonal" market anymore along the gulf coast, its pretty much March 1 to Oct 31 with the winter holidays.
The biggest mistake people make is buying a vacation rental to use during peak season. You'll never justify the investment that way. Need to use it during the off times and shoulder seasons.
Posted on 2/10/22 at 2:08 pm to blueboxer1119
You are too late. Prices on these properties have skyrocketed to the point where I am not sure how people are covering the mortgage off STR income. Also I’ve seen recently very inexperienced people buy $1 million properties with no plan (self manage vs Management company). These people are going to get crushed if the market turns south or there is a slowdown with STR income.
Also the down payment is 25% and interest rates are 100 basis points higher then your home.
Also the down payment is 25% and interest rates are 100 basis points higher then your home.
This post was edited on 2/10/22 at 2:10 pm
Posted on 2/10/22 at 4:07 pm to Man4others
quote:
These people are going to get crushed if the market turns south or there is a slowdown with STR income.
There will be another recession sooner or later, and a 50% decline in vacation property value has not been unheard of in the past.
Posted on 2/11/22 at 10:47 am to EA6B
quote:
There will be another recession sooner or later, and a 50% decline in vacation property value has not been unheard of in the past.
There’s definitely some markets they seem crazy, but real estate in general is crazy right now in many standard residential areas. A market correction is definitely likely but that could be said about many industries right now. I’m not convinced it will actually happen at this point, and I’m looking at real estate hoping it does!
Posted on 2/11/22 at 11:36 am to blueboxer1119
Unless you fully understand investing and the cost of money, only go into physical properties to diversify the investments of your accumulated wealth.
In other words, dont buy rental property unless you can pay cash
In other words, dont buy rental property unless you can pay cash
Posted on 2/11/22 at 11:57 am to 75503Tiger
quote:
In other words, dont buy rental property unless you can pay cash
This isn’t true. You just need to have plenty of cash or liquid assets for reserves if they are needed. It’s a bad idea to buy a 2nd home with 25% down and no other cash, without a doubt. But doing something like 40-50% down with the rest invested but liquid, is perfectly fine.
There’s a risk in everything. If you pay 100% cash and the market drops 50% you lose 50% of your money. That’s a risk also.
Posted on 2/11/22 at 2:24 pm to baldona
quote:
If you really want to consider a vacation rental, you should look at lesser known places.
Funny you say that.
One of my bankers tells me Ellijay, GA is the next boom. He's telling me to pass on the Smokies and go to Ellijay.
I had never even heard of it before he mentioned that to me.
Posted on 2/14/22 at 11:05 pm to blueboxer1119
Ellijay has already been blowing up for a year
This post was edited on 2/15/22 at 10:12 am
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