Best Places To Buy For Long Term

9 Replies

I'm in my 20's and have about $55,000 per year in discretionary income. I need something to put it into and figure real estate rentals are the best bet thanks to the combined returns of rental income and the accrued value of real estate itself. I can buy pretty much anywhere as I travel often and am rarely home ATM.

A family friend from Massachusetts bought a house on Nantucket island for $220,000 in 1996 and sold it for $1.2m in 2014. Meantime, they rented it out for thousands of dollars per year in profits. In total, this one house made them over $1 million profit - post tax - over the 18 years of ownership. I am looking to maximize my profits by buying in the most up & coming markets possible, anywhere in the country, in order to hopefully a similar situation. Obviously it is difficult to predict, but I am real estate newbie in that sense.

Ideally, I could buy something in the $300,000-$400,000 range today in a high volume vacation area (which I assume means no trouble finding summer renters) which in 10 to 20 years, I could likely sell for a 75-100% increase in property value.

This is my first one, so I apologize if it sounds dumb. That's just my basic thought process.

Outer banks/the Carolinas? Hilton Head? What current markets are the most up and coming? If you could buy anywhere (on a budget), where would it be keeping the long term market in mind? 

Thanks to all for imput/advice.

Originally posted by @Janine Franceschi:

Hi Patrick

Happy to speak with you about the real estate market on Nantucket. Please visit my profile for my contact information.

All the best,

Janine 

Promotion
Speed To Lead
Buy hot seller leads w/o subscription
Buy daily seller leads that are actually ready to sell
Finally there's a place where you can buy leads that asked for urgent help selling their house
Sign up for free

I think you could do well buying in an area with good schools and near a city center of a in a fast growing mid sized city with a moderate climate like Charlotte, Raleigh.  As the city "grows up" you could realize some pretty good appreciation.  Moderate climates allow for lower insurance rates, maintenance costs, construction costs, and encourage people to move to the city.  I think thats a lot more stable than buying a vacation home.  There are plenty of vacation communities you never heard of that once were in style and then drop off - Lake Lure for example.  I was in your situation a few years ago.  4 years later I'm doing substantially better and considering retiring within the next year or few.  All due to establishing rental properties.  If your interested in looking into Charlotte, feel free to reach out to me.

Patrick -

Have you thought about a vacation rental in the Disney World area - an hour from you?  It's a year round vacation market. Some are good investments and easily accessible for you to use as well.

Keith

Originally posted by @Patrick R. :

I'm in my 20's and have about $55,000 per year in discretionary income. I need something to put it into and figure real estate rentals are the best bet thanks to the combined returns of rental income and the accrued value of real estate itself. I can buy pretty much anywhere as I travel often and am rarely home ATM.

A family friend from Massachusetts bought a house on Nantucket island for $220,000 in 1996 and sold it for $1.2m in 2014. Meantime, they rented it out for thousands of dollars per year in profits. In total, this one house made them over $1 million profit - post tax - over the 18 years of ownership. I am looking to maximize my profits by buying in the most up & coming markets possible, anywhere in the country, in order to hopefully a similar situation. Obviously it is difficult to predict, but I am real estate newbie in that sense.

Ideally, I could buy something in the $300,000-$400,000 range today in a high volume vacation area (which I assume means no trouble finding summer renters) which in 10 to 20 years, I could likely sell for a 75-100% increase in property value.

This is my first one, so I apologize if it sounds dumb. That's just my basic thought process.

Outer banks/the Carolinas? Hilton Head? What current markets are the most up and coming? If you could buy anywhere (on a budget), where would it be keeping the long term market in mind? 

Thanks to all for imput/advice.

Patrick

Event though I am here in SC and love Hilton head. I think you can find plenty of deals at home what you are trying to do. Buy low and sell high. I was in North Port and Sarasota market for years 2009-2012.  Don't look at what your buddy did as that was a different time and the cycle has changed.

Now saying it wont happen again look at Sanfrancisco and NY prices still going up.

Alex 

Not sure what you know about vacation rentals... before you jump in, I'd suggest you understand the market you target and balance that against your expectations on returns. You buddy's retuned, BTW, beat Berkshire Hathaway performance over the same period. And that's saying a lot. My warning would be "Past Performance is Not Necessarily Indicative of Future Results"

Buying at the tops of markets is not my cup of tea, but seems like I am in the minority. I'd stick to a low/no load index fund as part of the plan and avoid vacation rental markets unless you have a specific, high cash-flow niche that mitigates the seasonal downside inherent in most VR business.

My 2 cents

Hello and welcome to BP!  If it looks good on paper you could do it.  I hate to sound biased because I was born and raised there, Dallas is a good place to invest long term and so is Memphis and Austin.  Just go with an experienced and good property management company that you can believe in to go turnkey.  That way you don't have to travel.  Good luck!

Im not sure if you have already reached out to the people before me, but I can see the logic in your thoughts.  It would be a smart move, but keep in mind that what your friend did doesn't always happen, even after taking your time and picking an area that appears to be on the up and up.   Raleigh has always been a very progressive city, and there are many plans for future development and growth. If you're interested in looking at a few properties in the area let me know!