We did a thing!
We purchased a vacation home in Florida. During a global pandemic. In hindsight, it sounds crazy. We felt a little crazy making such a huge investment but it's just that, an investment. A business. Which leads to Passive Income.
For years, we've been looking at vacation homes in Orlando/Kissimmee because it's literally one of our favorite vacation spots.
COVID-19 created this perfect storm of events that led us to pull the trigger.
Interest rates were rock bottom
We were in desperate need to take a vacation
We already had a nice savings bucket (we were originally planning on buying an RV)
The virus were making some investors nervous so there were some motivated sellers
Bookings for rentals in our neighborhood during COVID-19 weren't bad even in the midst of a pandemic
So we pulled the trigger! Owning a vacation home has been a dream of mine for years. We're literally in Orlando or Kissimmee at least once per year so I've already been in contact with a local realtor who was sending me properties to view via email.
Renovations (Minor Renovations)
This part was both fun and stressful. From staying in rental homes previously, we know that homes with multiple beds in a room with nice furnishings and details rent for higher prices. The home we purchased was already in great condition but we felt it could be better. So, as soon as our offer was accepted, I went shopping and planning.
The stressful part was planning, purchasing and receiving all of our items PRIOR to closing on the house. Our rental has 4 bedrooms so our renovations went like this
Master Bedroom - we left this as is
Main Floor In-law Suite - We switched out the Queen bed for a King
3rd Bedroom - We put up a Minions mural on the wall and added matching comforters and accessories
4th bedroom - We added a second bed and added a Disney Cars themed mural in the room
Downstairs - replaced the living room rug to add a bit of color into the room and bought a new coffee maker
Replaced all of the pillows and bought all new towels/sheets
And of course added cable and internet so that all of the tv's can be used to stream Netflix, Hulu, Amazon Prime etc
Writing the above list didn't seem like much but it was really hard work and it took us about a week to get everything situated. I was very happy and satisfied with our hard work at the end.
Why Real Estate is a Solid Investment
So there are a ton of different types of investments out there. You can invest in stocks, bonds, options, or even invest in yourself. But the biggest investment that directly contributes to the wealth gap is investment in property. If you are looking for a good, but sobering, read on this study, I implore you to read the Color of Law.
Short-Term Rentals are a Business
Deductible Expenses are generous for Short Term Rentals (you can deduct almost everything but consult your tax advisor first)
You will probably want a Property Management company unless you are local and check up on things frequently
You will need to have all of the proper county and state licenses to operate (another reason why we chose our PM, they handle all of that for us)
It's a business that you can enjoy for free anytime you'd like. When traveling with our family of 5, lodging is usually one of our biggest expenses.