Just did my taxes and am VERY pleased with the return on our investment. I'm assuming those who are criticizing people who invest in property and SoWal are doing extremely well with their choice of investments (and I'd love to know what those investments are so we can, too, can join in on these smart decisions).
As for our cottages, no -- we don't cover all of our costs through our rentals and I earn extra income by working extra (fortunately at work that I enjoy very much and would do even if I didn't have to pay for these cottages) to cover some of the costs of carrying these two cottages. However, a lot of the costs are indeed covered by rentals, moreso than I had initially expected. We have two properties and the combined rental income certainly pays for all of the expenses for one of those cottages after only 3 years of ownership of one cottage and 2.5 years of ownership of the other. And we've spent quite a bit of money to make sure the cottages had quality furnishings and equipment, so the start-up was pretty expensive. I think we're finally through with high-ticket purchases for a while.
We do indeed pay quite a bit for the management fees from our management company, but I believe they earn those fees and I'm happy to pay them to take good care of the cottages and guests since I can't be there to do it myself. Sure, the value of the cottages went way up and then settled down again, but they're still now worth a pretty penny more than when we bought them.
One thing I can't do with stocks or my retirement account is that I get to enjoy the cottages a lot now by myself, with family, and with friends. I get to meet and hang out with SoWallers who are wonderful, learn about life at the beach and the environment, so my life is even fuller than before (and it was pretty darn good before). If all goes well (which we can never predict because life can always bring in something unexpected -- but that could happen whether or not we had the cottages), I get to hand them down to the kids someday (along with all the memories they've made at the cottages with us, their friends, their kids, etc.). We didn't put all our financial future in one basket -- there are other investments as well so our future doesn't ride on the cottages. And like most people, we're thinking long-term not short term. Most people on this board who have bought property in SoWal are pretty smart investors and enjoy living well and see their property in SoWal as part of a broader life plan and financial picture.
The only thing I worry about is a devastating hurricane someday. Right now, that would hurt quite a bit because we'd lose rental income. But within about 5-8 years, even a hurricane wouldn't be devastating as long as we have insurance and aren't counting on rentals, though it would certainly put a dent in our plans. When I get nervous, I remind myself that, though possible, the odds of a high 4 or 5 level hurricane are very low. I remind myself that this is not the time to panic because if I do, I'd probably kick myself in a few years for having panicked.
Anyway, this is just one person's experience to throw out their as a possible scenario.
As for our cottages, no -- we don't cover all of our costs through our rentals and I earn extra income by working extra (fortunately at work that I enjoy very much and would do even if I didn't have to pay for these cottages) to cover some of the costs of carrying these two cottages. However, a lot of the costs are indeed covered by rentals, moreso than I had initially expected. We have two properties and the combined rental income certainly pays for all of the expenses for one of those cottages after only 3 years of ownership of one cottage and 2.5 years of ownership of the other. And we've spent quite a bit of money to make sure the cottages had quality furnishings and equipment, so the start-up was pretty expensive. I think we're finally through with high-ticket purchases for a while.
We do indeed pay quite a bit for the management fees from our management company, but I believe they earn those fees and I'm happy to pay them to take good care of the cottages and guests since I can't be there to do it myself. Sure, the value of the cottages went way up and then settled down again, but they're still now worth a pretty penny more than when we bought them.
One thing I can't do with stocks or my retirement account is that I get to enjoy the cottages a lot now by myself, with family, and with friends. I get to meet and hang out with SoWallers who are wonderful, learn about life at the beach and the environment, so my life is even fuller than before (and it was pretty darn good before). If all goes well (which we can never predict because life can always bring in something unexpected -- but that could happen whether or not we had the cottages), I get to hand them down to the kids someday (along with all the memories they've made at the cottages with us, their friends, their kids, etc.). We didn't put all our financial future in one basket -- there are other investments as well so our future doesn't ride on the cottages. And like most people, we're thinking long-term not short term. Most people on this board who have bought property in SoWal are pretty smart investors and enjoy living well and see their property in SoWal as part of a broader life plan and financial picture.
The only thing I worry about is a devastating hurricane someday. Right now, that would hurt quite a bit because we'd lose rental income. But within about 5-8 years, even a hurricane wouldn't be devastating as long as we have insurance and aren't counting on rentals, though it would certainly put a dent in our plans. When I get nervous, I remind myself that, though possible, the odds of a high 4 or 5 level hurricane are very low. I remind myself that this is not the time to panic because if I do, I'd probably kick myself in a few years for having panicked.
Anyway, this is just one person's experience to throw out their as a possible scenario.
