Rental/investment property

The title might be a little misleading, but I wasn't sure how else to word it.
Every year, my wife and the kids and I head up to my families cottages in and on Torch Lake. We've saved some money up, and one of the thoughts I had was buying a townhome/condo in or around Shanty/Schuss Mt. If I could buy a place for about $100k or less, that might make the mortgage on it somewhere around $6-700 a month. That makes it about 8400 a year. I figure I might be able to rent it out, and come close to break even, giving myself a free place to stay for a week or two. If during the summer, I could get $700 a week, which isn't bad for 3 bedroom, 2 bath place, for 12 weeks, that would be near breakeven on the mortgage and taxes. I guess I'd probably have to contract a managing company and maybe cleaning company. I'd assume the place would be dormant most of the fall and spring, so maybe even do discounted rentals, something like $500 a month during those months.

Anyway, I'm rambling on. I know there is risk, and I couldn't afford to buy it in cash, but could this work in that area?

I don't know that area, but make sure you take into account, besides principal and interest, taxes, condo fees, utilities, insurance plus there's always some maintenance expense.
I'd also check what management companies charge and what you get for your money. They also can probably give you a better idea of what the local market is like.

InTenSity wrote:The title might be a little misleading, but I wasn't sure how else to word it.
Every year, my wife and the kids and I head up to my families cottages in and on Torch Lake. We've saved some money up, and one of the thoughts I had was buying a townhome/condo in or around Shanty/Schuss Mt. If I could buy a place for about $100k or less, that might make the mortgage on it somewhere around $6-700 a month. That makes it about 8400 a year. I figure I might be able to rent it out, and come close to break even, giving myself a free place to stay for a week or two. If during the summer, I could get $700 a week, which isn't bad for 3 bedroom, 2 bath place, for 12 weeks, that would be near breakeven on the mortgage and taxes. I guess I'd probably have to contract a managing company and maybe cleaning company. I'd assume the place would be dormant most of the fall and spring, so maybe even do discounted rentals, something like $500 a month during those months.

Anyway, I'm rambling on. I know there is risk, and I couldn't afford to buy it in cash, but could this work in that area?

The next recession is coming with 18-24 months - wait to buy until then. Do your due diligence in the meantime.

The next recession is coming with 18-24 months - wait to buy until then. Do your due diligence in the meantime wrote:

Do you know how cheap having a $700 mortgage that covers the taxes and insurance sounds to me? I can't imagine that the HOA fee's are more than $100 a month. Its just something I'm thinking about doing and obviously I would have to make sure that we could afford to do it if we can't find the renters. I don't know the market up there too much, but I don't think that housing prices would fall by 50%, and if I could hang on, it wouldn't matter.
Although with the timeframe you're talking about, that's probably when I'd be looking. I'm going to start doing homework this summer on the feasibility.

Maybe it's just my own personal bias, but I'd think that if it's not on the water, then it may not be a strong rental property, as you're limited to just skiers and golfers. At least from what you said, it doesn't sound like it's on a lake or river. I'm sure you can research the viability of rentals like that, though.

My aunt's family used to rent out a place on Intermediate Lake north of Bellaire. I believe they used this Paradise Vacation Properties company. I put a link below, but they might be worth calling to pick their brain. I can't vouch for how good or bad they are as a management company, though.

http://mytorchlake.com/

I'd have to see what they are able to rent for. If I could afford a place on the lake, well..I wouldn't be living where I do in Kendall and I'd be east of US1. I'd imagine lake rentals would be running in the couple of thousands/week, at least at Torch, probably around $200 a day for Bellaire and I don't know about Intermediate lake.

Do you know about non homestead taxes? Does that not apply since you don't live in MI?

WhiteBoyHatcher wrote:Do you know about non homestead taxes? Does that not apply since you don't live in MI?

Most of the property tax amounts you see on the listings up here are non homestead, though you're right it's something to be aware of.

LooseGoose wrote:

WhiteBoyHatcher wrote:Do you know about non homestead taxes? Does that not apply since you don't live in MI?

Most of the property tax amounts you see on the listings up here are non homestead, though you're right it's something to be aware of.

I just can't imagine that the taxes would be more than $2000 a year on a $100k property. There is no way that insurance costs as much as it does in Florida either.

I went to a timeshare presentation today. Thank god I made it out of there. Two hours and all I got was a fit bit and two passes for the breakfast buffet

Herbie Green wrote:I went to a timeshare presentation today. Thank god I made it out of there. Two hours and all I got was a fit bit and two passes for the breakfast buffet

Are you in Florida?

Old country buffet?

WhiteBoyHatcher wrote:

Herbie Green wrote:I went to a timeshare presentation today. Thank god I made it out of there. Two hours and all I got was a fit bit and two passes for the breakfast buffet

Are you in Florida?

Myrtle Beach. Although I was just in Florida two days ago

Judging by my wife's facespace timeline, per my wife, every single person with elementary aged kids is in Florida right now. Except us.

I think over half of the people here are from Michigan. We might be about the only ones on this last week of Spring Break