Like any other financial investment, it depends .. I know people that have several units and rent them to long term tenants only.. They pay cash, and consider any net income as a pension annuity. They select the tenants and directly take care of any maintenance issues. On the other end of the spectrum is short term rentals, since you want to use the property as much as you can .. A mortgage and a property management fee with me not choosing the tenants ? Money loser and higher damage potential.
I go on cash flow and Return on investment. With ANY cash outlay I require a MINIMUM of 5-6% on my money.. not including appreciation. So now it;s a math exercise, which I;ve done countless times. So on OPTION A, you;re laying down 200-250K. Will you get $12-15K / year cash return after ALL expenses ? In OPTION B, 20% down is 40-50K, requiring a 2400-3000 /year return. A roof or an HVAC will wipe out several years of potential profits.. Is it worth it ? Remember, on OPTION B, you have 3 and maybe 4 good rental months a year .. perhaps the same months you;d like to be here. Other than that, slim pickings. At the same time, if you;re looking for a nice warm place to crash in between layovers, and don;t care about the cash flow aspect, welcome aboard, the place is great !
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