Best Retirement / Investment properties right now?

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StevenNJ1
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Joined: Fri Apr 04, 2014 12:56 pm

Best Retirement / Investment properties right now?

Post by StevenNJ1 »

I am about 20 or so years away from retirement, however, I am looking to possibly buy a 1 bedroom condo somewhere where I may retire later in life but for now have it make a bit of money by renting it out or at least pay for it self. Also prefer for this property to be under 40 min away from a major airport. I began thinking about Florida properties, something on the beach, which will be desirable on websites like HomeAway and AirBnB.

Very curious to get any sort of helpful advise from people that know much ,ore than I do on this topic.

My approximate budget for a condo ... under 300k.

Thank you.
BeanCity
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Re: Best Retirement / Investment properties right now?

Post by BeanCity »

Honestly, need a lot more background info than what you have provided.
SRenaeP
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Re: Best Retirement / Investment properties right now?

Post by SRenaeP »

I wouldn't buy a property now with plans to live there in 20 years. There's a lot that can change in that timeframe.

If you considering buying a property that you can Airbnb, I would crunch the numbers very conservatively, have a plan B, plan C and exit strategy. Many municipalities are enacting legislation to restrict short-term rentals. If the ability to Airbnb the property is eliminated, you don't want to be stuck with an empty place and probably losing money if you sell.
jebmke
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Re: Best Retirement / Investment properties right now?

Post by jebmke »

SRenaeP wrote: Mon Feb 04, 2019 10:41 am I wouldn't buy a property now with plans to live there in 20 years. There's a lot that can change in that timeframe.

If you considering buying a property that you can Airbnb, I would crunch the numbers very conservatively, have a plan B, plan C and exit strategy. Many municipalities are enacting legislation to restrict short-term rentals. If the ability to Airbnb the property is eliminated, you don't want to be stuck with an empty place and probably losing money if you sell.
I'd go even further. If it is an area you haven't lived in extensively, I would not even buy property at the time of retirement. I would lease a place for a couple of years to make sure you chose well.
When you discover that you are riding a dead horse, the best strategy is to dismount.
oldmotos
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Re: Best Retirement / Investment properties right now?

Post by oldmotos »

I did something similar and bought a condo in SW Florida 9 years ago for under 300K and have been renting it to snowbirds. It has worked pretty well and covers the expenses but not much of the mortgage payment. It has increased in value so I locked in a lower cost than if I would have waited for retirement. It also has provided some good tax deductions for depreciation and travel costs to an area I like to visit anyway. There are some hassles like with any rental property. Also Homeaway/VRBO and others have made changes detrimental to the property owners. The nice thing about renting to snowbirds for 1-4 month stays is they often come back every year so you can work with them directly and avoid Homeaway.
Topic Author
StevenNJ1
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Re: Best Retirement / Investment properties right now?

Post by StevenNJ1 »

oldmotos wrote: Mon Feb 04, 2019 1:12 pm I did something similar and bought a condo in SW Florida 9 years ago for under 300K and have been renting it to snowbirds. It has worked pretty well and covers the expenses but not much of the mortgage payment. It has increased in value so I locked in a lower cost than if I would have waited for retirement. It also has provided some good tax deductions for depreciation and travel costs to an area I like to visit anyway. There are some hassles like with any rental property. Also Homeaway/VRBO and others have made changes detrimental to the property owners. The nice thing about renting to snowbirds for 1-4 month stays is they often come back every year so you can work with them directly and avoid Homeaway.
Great info. Thank you.
I assume this has to be a beach front property? When studying HomeAway and looking at how far in advance these places are booked, beachfront is a must. Please tell me if that's what you noticed as well. Also, just curious in what city you bought your condo and if you know of good value cities these days.

Again, thank you.
oldmotos
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Re: Best Retirement / Investment properties right now?

Post by oldmotos »

StevenNJ1 wrote: Mon Feb 04, 2019 1:19 pm
oldmotos wrote: Mon Feb 04, 2019 1:12 pm I did something similar and bought a condo in SW Florida 9 years ago for under 300K and have been renting it to snowbirds. It has worked pretty well and covers the expenses but not much of the mortgage payment. It has increased in value so I locked in a lower cost than if I would have waited for retirement. It also has provided some good tax deductions for depreciation and travel costs to an area I like to visit anyway. There are some hassles like with any rental property. Also Homeaway/VRBO and others have made changes detrimental to the property owners. The nice thing about renting to snowbirds for 1-4 month stays is they often come back every year so you can work with them directly and avoid Homeaway.
Great info. Thank you.
I assume this has to be a beach front property? When studying HomeAway and looking at how far in advance these places are booked, beachfront is a must. Please tell me if that's what you noticed as well. Also, just curious in what city you bought your condo and if you know of good value cities these days.

Again, thank you.
I bought a 2 BR 2 BA condo 4 blocks from the beach in Marco island, FL. At that time I could have bought a small 1 bedroom condo on the beach for approx. 30% more but decided to go with the one I did as it is on a canal with a boat lift. A condo within an easy walk of a beach entrance is also easy to rent. The one bedrooms on the beach in this area are most commonly weekly rentals which I wanted to avoid although they usually bring in more money. I am not sure I would call Marco Island a good value city but we like it there so were willing to pay the price. It is not a party town so it is easier to get good renters who will respect your property.
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Sandtrap
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Re: Best Retirement / Investment properties right now?

Post by Sandtrap »

StevenNJ1 wrote: Mon Feb 04, 2019 9:34 am I am about 20 or so years away from retirement, however, I am looking to possibly buy a 1 bedroom condo somewhere where I may retire later in life but for now have it make a bit of money by renting it out or at least pay for it self. Also prefer for this property to be under 40 min away from a major airport. I began thinking about Florida properties, something on the beach, which will be desirable on websites like HomeAway and AirBnB.

Very curious to get any sort of helpful advise from people that know much ,ore than I do on this topic.

My approximate budget for a condo ... under 300k.

Thank you.
Is your existing income stream large enough to pay the mortgage on the rental unit if you do not have a tenant?
Will your rental property be within a day driving distance from your existing home?
Does the area that you are considering buying and renting have a history of property appreciation?
Will you be able to recover all of your money if you decide to sell the rental unit after 3 years, 5 years?
Will you be using a property management company and if so, have you considered the cost and fees?

Thoughts:
20+ years from retirement is a long way. First look at this investment as having nothing to do with that.

Will you be using the rental unit when you have vacancies, or block out time for yourself?

j
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Topic Author
StevenNJ1
Posts: 270
Joined: Fri Apr 04, 2014 12:56 pm

Re: Best Retirement / Investment properties right now?

Post by StevenNJ1 »

Sandtrap wrote: Mon Feb 04, 2019 2:21 pm
StevenNJ1 wrote: Mon Feb 04, 2019 9:34 am I am about 20 or so years away from retirement, however, I am looking to possibly buy a 1 bedroom condo somewhere where I may retire later in life but for now have it make a bit of money by renting it out or at least pay for it self. Also prefer for this property to be under 40 min away from a major airport. I began thinking about Florida properties, something on the beach, which will be desirable on websites like HomeAway and AirBnB.

Very curious to get any sort of helpful advise from people that know much ,ore than I do on this topic.

My approximate budget for a condo ... under 300k.

Thank you.
Is your existing income stream large enough to pay the mortgage on the rental unit if you do not have a tenant? It is, at least for now, but I have been doing this type of work that I do for the past 15 years, so somewhat stable.
Will your rental property be within a day driving distance from your existing home? Nope. It is a 3 hour flight.
Does the area that you are considering buying and renting have a history of property appreciation? Not sure as I am not set on specific area
Will you be able to recover all of your money if you decide to sell the rental unit after 3 years, 5 years? Not sure
Will you be using a property management company and if so, have you considered the cost and fees?I probably would if it made sense, cost wise. I calculated around 30% of rental revenue going to them, to be conservative, unless that's not conservative enough.

Thoughts:
20+ years from retirement is a long way. First look at this investment as having nothing to do with that.

Will you be using the rental unit when you have vacancies, or block out time for yourself? That is the idea. I want to have a place we can go to when we feel like it ... unless we rented it out for an extended stay

j
To answer your questions ... please see above in red.
StealthRabbit
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Re: Best Retirement / Investment properties right now?

Post by StealthRabbit »

this can be one of your 'tools' to help you into retirement.
I have done various RE investments from age 19 and they have contributed ~50% to wealth building and are 50% of cash flows in retirement.
But you must know your markets and buy right (do not overpay).
ALWAYS buy special interest properties (that can resell quickly and have equity appreciation)
I use a 1% rule... it MUST gross 1% of capital expense / month (ie. $300k prop must spin $3k / month gross) Of course you need to know your expenses.
Never buy something you are not willing to be stuck with, or live in. (forever) --- RE is NOT liquid!

I have 6 'remote' props and they do fine (1/2 are under management and 1/2 are managed by me). I bought them in area I intended to 'snow-bird' / retire. I keep a car near airport ($50 / month) and fly monthly to attend to. In retirement I will be located there 6 months / yr, so not so frequent flights.

Generally... seasonal rentals in Vacation spots do not yield good annual returns (Management costs and vacancies), often better to rent FT for less that daily / weekly rate. (each of my props have (2+) living spaces or RV spots, so something for me to use (for free))

warning: Florida is very high on insurance rates (and potential damages) from tenants and storms.

Get a local mentor (a 'seasoned' (30 yr+ experience) commercial dude(ess) , independent preferred).
Be really cautious and wise (pest inspections / insurance / structure / cash flows)

Run the numbers, backward, forward, sideways.
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