What if I told you there was a way to buy a lake house (or other vacation property), and get someone else to pay for it? Seems crazy, I know, but I've done it. Twice. Let me tell you my story...
First of all, like a lot of people, I've always wished for a lake house near Austin. I've done well in my career, but not to the point that I could plunk down 20% on a decent place *and* afford two mortgages. But in 2019 I stopped wishing and asked myself how I could make it happen.
To make a long story short, my strategy involved two key things:
(1) Partnering with friends whom I enjoy hanging out with, who also have kids around my daughter's age. This cut my down payment obligation down from 20% to 5% and does the same thing for operational expenses.
(2) Putting the property into the short-term-rental pool for much of the year. Generating rental income has allowed us to not put a nickel towards paying our mortgage, insurance, etc. Our best month to date was this past July with over $21,000 in gross rent!
You can take a look at the property here. We use a property management company, so we don't get those calls when the toilet breaks and we don't deal directly with guests. We have built up a good amount of cash in reserve now, and we could update the home or take it out of the rental pool and absorb the hit to revenue if we choose to.
Another tip from my experience - we bought a home that was already updated and on VRBO and AirBNB, and we validated this was okay with the HOA before making our offer. We closed in April, right before rentals took off for the summer, so we had income from the start.
Obviously there are many nuances that I can help you navigate if you're interested in this strategy - picking a partner, operating agreement, revenue projections, property management, ideal size and location for a home, etc. One of the things I'm most excited about is, taking the long-view here, our kids will inherit a paid-for house on Lake LBJ that they can use when they like and take income when they don't!
Want a customized strategy for your? Please fill out the form below to get your consultation.