Idea.. Am I crazy..

H

hackalar

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So I want a new boat. Let's say around 130k and I have the cash to buy it. I was thinking about buying 2 houses with that money and using the incoming rent to pay for the boat payment. My thinking is 10 years from now my boat is only worth around 30k but I still have the equity of the two houses I bought. Am I thinking crazy here?

I already have other rentals so this wouldn't be a new adventure. I know what's involved with having rentals.
 
I don't think so, rental property is doing very well around me. If you have the money now is the time to buy.
 
If you want a boat that will not depreciate so much, have a look at the older Chris Craft Commanders. Built solid and all fiberglass, no wood. Bulletproof, and they hold their value. Mine is worth more than I paid for it 8 years ago. Prices are great and they will go for years with minimum maintenance costs. You get a lot of boat for your money. Here is a link to those for sale on the owners association site.
http://www.commanderclub.com/Shop/For_Sale.htm
 
Bobby,
It makes good sense, in this economy renting will be on the rise for the next five years. I'll also add that when then economy turns you will build equity in the houses but a boat only depreciates.
Rob
 
quote:
Originally posted by Brite Idea

Bobby,
It makes good sense, in this economy renting will be on the rise for the next five years. I'll also add that when then economy turns you will build equity in the houses but a boat only depreciates.
Rob

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IMHO you are being quite conservative at 5 years.
 
quote:
Originally posted by Brite Idea

Bobby,
It makes good sense, in this economy renting will be on the rise for the next five years. I'll also add that when then economy turns you will build equity in the houses but a boat only depreciates.
Rob

Click to expand...


+1

Bob
 
quote:
Originally posted by lanbuilder

....Here is a link to those for sale on the owners association site.
http://www.commanderclub.com/Shop/For_Sale.htm

Click to expand...


Those are very pretty boats. I can picture myself on one. If only I could convince the bank to picture me on one as well! In all seriousness, it's time for these old bones to slow down a bit.

That CPMY is the nines!
 
Once the real estate turns, the up tick in rentals (due to foreclosures etc...) will go away as people start to buy homes again.
 
Hacklar, theory is good, i have a rental.
Make sure you have reserve cash for major repairs and float money when there is no tenant, or when a tenant stops paying rent.
You could be in a bind if you lose the rent income for a while - now you have a mortgage and a boat payment to make.

Getting a good tenant is crucial, if you have never rented a house before, get some advise from those whome have first.
 
quote:
Originally posted by Salvatore356

Your going to buy 2 houses for $130,000 were I live thats a down payment for 1 house.

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I have a friend who rents houses that can be bought two for $130,00. He has nothing but trouble with his tennants. I have another friend who did the same and she went bankrupt.

As for the economy over the nect five years, it depends a lot on who wins the US election in November.

For the OP - Only you can make that decision. If you want help, get it from a qualified investment professional, not a bunch of boaters. The fact that we even own boats disqualifies us as financial advisors.
 
No, this will not work. It is very hard to make money on single family home rental. You might come out ahead with a multi-family. A single family rents for 25% more than an apartment but the investment is 50% more. Still, for the amount of work that goes into it, it may not be worth your time.
 
Where i live an average house value is around 120K I can buy forclosed houses all day for 30 to 50K that needs very little work. We have a unlimited number of tenants. When i run a for rent ad i will get over a 100 calls in the first few days. in this area there is not enough houses for rent.

Of course i have money in the bank. Even if both houses didn't rent for 6 months i would be fine. i just think in the end i would be better off having a couple more houses and a boat then just a boat...

everything i own is paid for including my house.
 
Also where we live there is very little multi family and no apartments..
 
I like your thinking of using assets to pay for liabilities. Do you happen to follow Robert Kiyosaki?
 
Hackalar;

As you state you have already been a landlord so you know all of the troubles that come with it. I currently am renting out a home, but for a totaly diferent reason, the sales market if flat.

I wish I could show a profit on the rental, but the truth is that in order to get a good tennat we had to settle at a monthly rent that is slightly below monthly expenditures. The only place that I am making any money on it is the tax deduction I'm receiving, and thus not having to pay as much at the end of the year as I would without it.
 
Yes, another creative way to justify spending money on boats!
 
One of the best ways though...at least he will getting someone else to pay for it. From all of his posts, I think it is a no brainer. He has the landlord experience, back up assets, the demand is there, and the cost of the properties is low. Buying higher end properties makes the pay back a lot longer and sometimes the only way to come out on those is to hope they appreciate in value.
Then there are places with laws that are awful for the landlord.
I know everyone has different circumstances but when I hear that someone didn't make it with a rental, I am always curious as to what went wrong. I will certainly agree that its not for everyone though and there are many ways to fail.
 
I think you have a good idea. I have owned two rentals for the past 30 years. If I was younger I would be a buyer in this market and add to my rentals.

George
 
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