Rental Property Opinion

[TexasBob]

If you were going to buy an investment- Single family house to rent or condo for vacation rental area? Why?


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[Burnadell]

For the investment potential?

[mjhaverkamp]

Cabins in Broken Bow OK, it is happening there, cabins rent from 180 a night to 500 or more, you can hire a management company to take care of it, block it out when you want to use it.

[Ag 96]

Done both and still have our single family rentals. Won’t ever do vacation rentals again. Purchase price is generally inflated and people take even less care of them, even after pricing out the riff-raff. I especially won’t ever do a vacation house on salt water again. Salt water doesn’t mix well with electricity, wood or drunk vacationers. Just too much hassle even at $800 a night!

[spro]

Get a lake house. I have one on Lake Granbury. It's rented almost every weekend for entire year. Rentals cover mortgage plus a lot lot more. Plus it has doubled in value.

[TexasBob]

For the investment potential?

Yes sir. We have been discussing buying a house to rent out but a condo etc in a vacation area seems like it may give a better return


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[TexasBob]

Thanks guys, great points. Keep them coming.


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[batmaninja]

Look at your PITI, your payments (principle, interest, taxes and insurance). Then look at your net income from renting, netting out realtors, HOAs, VRBO fees, cleaning fees.

Hint: It wont be condos. It probably wont be vacation homes either.

[ken]

Do you want a new tenant every week or every few years?

If you are buying purely for investment then single family homes will give you the higher return. If you are looking for something that you can use for family fun and rent out to get most of you expenses back vacation homes are more fun. I have both.

[STGS]

My biggest recommendation is to buy with cash. Not everyone will agree with me, but it sure makes vacancies and market downturns a lot less painful.

[BuckSmasher]

My biggest recommendation is to buy with cash. Not everyone will agree with me, but it sure makes vacancies and market downturns a lot less painful.

FWIW REI is what I do for a living and I am one of the ones that STRONGLY advocates against this.

[Charles]

FWIW REI is what I do for a living and I am one of the ones that STRONGLY advocates against this.

Please explain why.

[RiverRat1]

FWIW REI is what I do for a living and I am one of the ones that STRONGLY advocates against this.

Why?

[BuckSmasher]

Why?

Several reasons:

1. The less of your own money you have in a property the less your total risk. I don't like having money in a deal for more than two years, if at all.

2. Higher cash on cash returns with leverage. Without leverage Real Estate doesn't favorably compare to stocks and bonds and other zero effort investments. Why would someone work on an asset that makes them no more money than a mutual fund? The math doesn't work.

3. We are in an unprecedented era of low interest rates. This has already begun to change.

This is just my opinion but owning real estate with cash is 'hoarding cash' not investment.

[HogHunter34]

Several reasons:

1. The less of your own money you have in a property the less your total risk. I don't like having money in a deal for more than two years, if at all.

2. Higher cash on cash returns with leverage. Without leverage Real Estate doesn't favorably compare to stocks and bonds and other zero effort investments. Why would someone work on an asset that makes them no more money than a mutual fund? The math doesn't work.

3. We are in an unprecedented era of low interest rates. This has already begun to change.

This is just my opinion but owning real estate with cash is 'hoarding cash' not investment.

So is this recommended for long term renting? Just curious what %cash max you recommend in a home to balance risk & be worth the income?