Great Advice!! Thanks.
Mike
QUOTE (thomasbeyer2000 @ Jan 16 2008, 02:20 PM) Seasonal vacation properties are PURE SPECULATION. You speculate that the real estate value will go up while you hold, usually with huge negative cash-flow. The properties are rented perhaps 10-25% of the time, and if you wish to use it you get less revenue as you wish to go to Fernie when it snows not when it is late October (neither snow nor summer ..)
The management companies usually take between 25% to 50% of the gross revenue, THEN you pay: condo fees, taxes, mortgage payment, furniture replacement, new toaster, in-suite upgrades to damage ...
Buy a vacation property ONLY if you have enough cash to play and to cover the negative cash-flow.
It is NOT an investment .. it is a life style choice !
Money was invented for a reason: you exchange it for s.th. else ! If you wish to stay in Revelstoke or Hawaii or Vancouver Island or Fernie or Canmore for a few days or a few weeks a year: rent ! Then stay at a different place or a newer palce next year .. why always stay in the same place and lose money while you hold ?
Yes, in Canmore (where we reside) you would have made a fortune over the last 4-10 years on equity upside, but with negative cash-flow. Today, at $500,000+ for a condo, it is much riskier.
If you MUST buy a vacation condo (because you have too much cash usually) then buy one where there is year round activity and thus a higher chance for continous rental income .. in places like Hawaii or perhaps Canmore. Kimberly boasts year-round activity, but occupancy is WELL BELOW 20% .. maybe 12-15% (I did ask a real property management firm .. and I stayed at a place with 100+ units with perhaps 4-5 cars in the parking lot )!!
Why not buy a condo or townhouse or house or small apartment building in a city where people live and rent year round ? Steady income, and usually lower prices and usually equity upside .. if you pick cities with economic activity and in-migraton along the REIN suggestions !
