Buy a house as an investment

[HellsBells]

what is your opinion on buying a house and renting it out unfurnished for long terms. I believe lots of baby boomers will join TV in the near future and the house prices will rise. Would you invest in a rental property? What are your thoughts about this idea? :wave:

[graciegirl]

Hellsbells.

[rubicon]

Difficult to predict as there are a number of variables both national and local. What is encouraging is that building continues and as a large development remains at least for now economically sound.

I purchased my home with the intent to live in it the rest of my days and to leave it to my kids. They can sell it or use it as a get-a-way.

[HellsBells]

thanks

[asianthree]

there are 13 on thevillages4rent not rented...

[Challenger]

Buying a house as an investment is a roll of the dice. Speculation. If you buy a house you have concentrated resources in one area. No diversafication. Most novices ignor maintenance costs and are slow to make needed repairs etc . How old is the house? When will the roof need replacing? ($8-10,000) . When buying for investment, forget emotion(don't fall in love with the real estate). It is only an investment. Lacks liquidity.
Just some ideas for consideration.

[batman911]

Unless it is only a small portion of your investment portfolio, I would not want all my eggs in one basket (or community). You probably already have a sizeable investment in this community in the home you occupy. Diversification will protect you in most cases.

[casita37]

We've thought about it, but we just can't make the numbers work. Even renting unfurnished, assuming the tenant pays their own utilities, the owner really should still plan on the amenities fee, water, garbage and lawn care because they are not optional. Have to remember, too, everything else will be higher, such as taxes (no homestead), and insurance is higher on investment property, plus maintenance. In your own home, if the faucet starts a small leak, you jump right on it. If a tenant doesn't tell you until it becomes a bigger problem.....more expensive.

Having said all that.....if you're paying cash for the house and add up ALL the expenses, and your monthly net comes in higher than you are making in other markets, then I say go for it. Almost impossible to imagine TV real estate going bust anytime soon, and if you're right here to manage it yourself, you can save some on fees and really stay on top of things.

We would need to finance (by the way....higher interest rate , and down payment, on investment property), so it doesn't work for us, but if we had the cash, we probably would do it.

You could probably make more money on it if you furnish it and rent shorter term, but that's a whole other type of business and not for everyone. Aside from the higher rent, if you get a bad tenant, they are only here for a short time, and if the tenant is not taking care of "whatever", you're in the unit on a more regular basis to check things out.

Obviously a LOT to think about, but it's a great "part-time" job, if you're up for it.

Good luck!!

[ydnar9]

I think this real estate mini boom is not going to last. This is a short term rise in prices because rising interest rates are going to squelch the home sales which are now being fueled by investors. When housing payments get too high that will dry up many of the home sales and cash will be king. Might be some great buys if you have cash in the next couple years.

[2BNTV]

We've thought about it, but we just can't make the numbers work. Even renting unfurnished, assuming the tenant pays their own utilities, the owner really should still plan on the amenities fee, water, garbage and lawn care because they are not optional. Have to remember, too, everything else will be higher, such as taxes (no homestead), and insurance is higher on investment property, plus maintenance. In your own home, if the faucet starts a small leak, you jump right on it. If a tenant doesn't tell you until it becomes a bigger problem.....more expensive.

Having said all that.....if you're paying cash for the house and add up ALL the expenses, and your monthly net comes in higher than you are making in other markets, then I say go for it. Almost impossible to imagine TV real estate going bust anytime soon, and if you're right here to manage it yourself, you can save some on fees and really stay on top of things.

We would need to finance (by the way....higher interest rate , and down payment, on investment property), so it doesn't work for us, but if we had the cash, we probably would do it.

You could probably make more money on it if you furnish it and rent shorter term, but that's a whole other type of business and not for everyone. Aside from the higher rent, if you get a bad tenant, they are only here for a short time, and if the tenant is not taking care of "whatever", you're in the unit on a more regular basis to check things out.

Obviously a LOT to think about, but it's a great "part-time" job, if you're up for it.

Good luck!!

I basically ageree with this post. There are a lot of things to consider. The rael estate prices are starting to rise dramatically but if the numbers and the potential problems bother you, then you might want to reconsider.

Whatever decision you make that will make you sleep at night will be the right decision. :smiley:

[villagerjack]

Run the numbers. Don't forget depreciation. If you can get DEBT SERVICE COVERAGE(NOI/debt service) of 1x it could be a good deal. Real estate is rising and the Villages Could benefit because it is not in a Flood Zone. Biggert Waters could be a catastrophe for a lot of Florida homes. I hear it may be delayed for 4 years but it us still out there.