As the country’s largest manager of vacation rentals, Vacasa has access to actual performance data for thousands of vacation rental properties across the country. We recently packaged some of that data into a buyer’s guide called the Insider’s Guide to the Top 25 Vacation Rental Markets. In this post, I’ll discuss some of the elements we used to create our guide so you can apply the thinking in your own searches.

Get Insider Knowledge

First, a note about what makes our Insider’s Guide unique. The guide, which has been featured in dozens of publications from FOX Business to USA Today, offers both a high-level view and local look at the country’s top vacation rental markets. It’s our first investment tool that combines national data with insights from our local agents. We hope you find both the guide and methodology behind it helpful.

Related: 13 Mistakes New Vacation Rental Owners Always Make

The first element we considered (and the first element we recommend you consider when choosing where to buy a vacation home) is cap rate. If you’re not familiar with the term, capitalization rate, or, cap rate, is the ratio of a property’s net operating income over its value. It’s an easy figure to determine if you have the right data, but getting accurate net operating data for entire markets can be a challenge. This is where we’re hoping to add value.

To determine net operating income for our guide, we looked at actual performance data for over half a million U.S. vacation rental properties. From there, we calculated gross rental incomes for each market, then subtracted each market’s average operating costs. Finally, we divided those figures by the historical costs of buying a home in the markets to get cap rates, which we believe provide investors the truest representation of potential ROI.

But That’s Not All

The second element you should consider when choosing where to buy a vacation home is local expertise. Having access to local metrics that you can trust is essential when shopping for investment properties. That may sound obvious, but you probably have better things to do with your time than try to identify trustworthy local sources for vacation rental-specific advice in destination markets across the country. This is another instance where we felt we can provide value with our guide.

Related: 6 Steps for Successfully Investing in Vacation Rentals

Vacasa Real Estate currently works with expert agents in vacation rental markets across the country. These partners represent leading real estate companies including Berkshire Hathaway, Century21, Coldwell Banker, Keller Williams, RE/MAX, Sotheby’s and others. After we determined our top 25 markets, we picked up the phone and asked our real estate partners and our local property management teams for their best insider advice. Clicking on any of the markets in our guide will take you to a vacation rental market page with insights from local experts.

What markets are you looking at for vacation rental investments? 

Share in the comments below!





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Purveyors of a growing trend in the multifamily market, Starcity, is expanding its co-living operations to Los Angeles. Los Angeles is the second city Starcity is operating in. San Francisco, a city desperate for affordable housing, was the first.



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In the first fundraising round since Chris Rediger was named CEO, Redefy garnered a new equity partner that drove its valuation up to $25 million. As a result of his investment in the company, James Albertelli will join Redefy’s board of directors.



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Landis, a growing real estate investment platform that enables institutional investors to buy and sell residential real estate, is buying GoldenKey, a real estate startup that raised $4.5 million over the last few years before shutting down recently. The company was able to secure more than $4 million in funding, including investments by Lowe’s and its venture capital arm, but that wasn’t enough to survive.



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It happens all the time.

Your sweet 24 year-old renter (let’s call her Wanda) is the perfect tenant. She pays her rent on time, doesn’t treat the property badly, and she doesn’t even have any pets!

Then Wanda meets Tony (cue the horror soundtrack). Tony’s a classic good-fer-nuthin’ bum—he never saw a bill he wanted to pay on time, he limps between dead-end jobs, he drives a ‘70s muscle car and has a pit bull with a spiked collar (unoriginally named Spike).

Tony gets himself evicted from his ratty apartment because that’s the kind of person he is. Wanda, being a sweetheart, can’t let poor Tony sleep on the street! So she lets him crash for a few days while he “gets on his feet.”

We all know how this story ends. Tony’s still there six months later, and your property has suffered accordingly. Spike has made it his personal mission to urinate in every corner of your unit, Tony smokes suspicious substances inside, there’s trash everywhere, and the cockroaches have started sniffing around. In uglier scenarios, maybe he’s even dragged Wanda down to his level. Maybe she’s picked up that crack pipe too and has started taking liberties with her rent payments.

That’s actually not even the most nightmarish scenario. What if Tony is a violent sociopath with a history of assaults? What if Tony’s a pedophile? Maybe Tony cooks meth, and decided your property is the perfect place to set up his cooking lab?

The point is, you don’t know Tony, or Spike for that matter, because they were never screened and they aren’t on the lease. So how can you avoid Tony, Spike, and all the other deadbeat tagalongs who’d love to set up camp in your rental unit?



Related: 5 Legitimate Reasons to Allow a Tenant to Break Their Lease

It Starts With Tenant Screening

Some states prohibit landlords from just coming out and asking applicants directly if they’re in a relationship. So rather than open that can of worms, start by simply setting expectations: “Anyone who spends more than five nights/month in the rental unit must be included on the lease. Is there anyone else who will be staying over sometimes at the property?”

If they waffle, with answers like “Well, sometimes…” or “Uh, I don’t know, maybe some months?” ask them to please have this person fill out a rental application too. Should they object, politely explain that anyone who spends five or more nights/month at the property must be screened and sign a lease like everyone else. Property policy. It’s out of your hands.

Be especially wary if a couple shows up together to view your vacant property, but only one person says they’ll be living there. Dig deeper, and ask plenty of probing questions. It is your business—knowing who is living in your investment properties is the literal definition of your business.

Lastly, if everything checks out when you verify their income, housing history, credit history, criminal history, etc., drop by their current home. If two people live there and you don’t feel 100 percent rock solid about their story, decline the application. (Read up about more advanced tenant screening techniques here.)

It Continues With the Lease

Your lease agreement should be a solid shield, protecting both you and your property from harm. You can’t anticipate every possible way that renters can cause financial damage to you and your property—but you can anticipate the most common 99.9% ways you can be burnt and use lease clauses to protect yourself.

Case in point: squatting boyfriends. Your lease should have an occupancy clause saying (in appropriately dry legalese) that no one but the listed tenants and occupants may spend more than five nights/month at the property. If any non-listed persons do spend more than five nights/month at the property without written permission from you, the renter is in breach of lease and is subject to additional screening fees, higher rents, and/or eviction.

Related: The True Cost of a Bad Tenant: Why You CAN’T Afford Not to Screen [With Pics!]

Five is not a magic number, and no one’s proposing that if your renter’s boyfriend spends a sixth night there one month that you should rally the townsfolk to grab their pitchforks. But you need to draw a line somewhere, and you need make it crystal clear that unauthorized occupants constitute a breach of lease that will be punished. Severely.

BRRRR-strategy-deal

One More Reason to Make Inspections

You should be inspecting the rental unit at least every six months. Do you?

If not, then start. Beyond an occupancy clause, your lease should also include an inspections clause, informing the tenant that a manager will be coming by the rental unit at least twice each year to check on the property’s condition and tenant’s compliance with the terms of the lease agreement. Make sure to check your state’s laws on performing inspections and any notice requirements before entry.

How would you know that the renters aren’t cooking meth otherwise? Or running a puppy mill? Or just dirty people, who you don’t want to renew the lease with?

Coming by the property with proper legal notice not only reassures you that the tenants are treating the property well, but it also sends a loud message. You do not tolerate breaches of your lease. You are not an absentee landlord. It also lets them know you care about the property and want to keep it in good condition.

What Happens if Your Renter Is Shacking Up?

Life happens, right? Maybe Wanda only dated Tony briefly before realizing what a bum he was, then met her soulmate William. William’s a sweetheart himself, works a good job, and (yay!) they just got engaged.

The proper protocol for renters who want to move a roommate or boyfriend into the property is to call their landlord and discuss it with them (you) first. Yes, it’s that simple.

For landlords, the proper protocol is to thank the renter for being forthright about it and emailing them a blank rental application for the proposed new tenant to fill out. Or if you caught them being sneaky, sending a breach of lease notice. You’ll have to use your own judgment about whether it’s worth letting the new occupant apply—or whether you want to evict them both over it.

Regardless, you can then screen the new addition like any other tenant. If they look good, require both tenants to sign a new lease agreement (for a full new lease term). Consider charging higher rent, especially if the new tenant is bringing a pet with them or they were sneaky about moving in the boyfriend.

If they don’t pass muster, reject them. That may mean your renter moves out, but it’s better to lose one good tenant to avoid a walking liability. The world is full of great renters; lease to honest, responsible people, and you’ll find that being a landlord is the easiest job in the world.

Lease to deadbeats like Tony, and you’ll discover that being a landlord is not only the most aggravating job in the world, but also the most expensive.

We’re republishing this article to help out our newer readers.

Ever had a tenant pull a fast one on you? Maybe you’ve dealt with a “Tony” of your own? How did you handle it?

Don’t leave us in the dark!





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“What do you think separates successful real estate investors from those who give up, fail, or never get started?”

Brandon Turner asks this question each week to guests on the BiggerPockets Podcast. Of course, there is a wide variety of answers, none of them more right or wrong than the other, but there is one thing that can be a true deal maker or breaker when it comes to giving up, failing, or never getting started—mindset.

Mindset is such an important part of investing and financial independence and such a key factor to not giving up, failing, or never getting started.

So how does an investor/landlord/property manager not only keep their head above water but maintain their focus to ensure long-term success? Here are a few simple reminders to play on repeat during the day-to-day or when times get tough. They’ll help keep you in check when you’re feeling overwhelmed in the real estate game.

5 Mindset Hacks to Conquer the Roadblocks That Sideline Other Investors

1. Assume positive intent (until you know otherwise).

Assuming positive intent is a must for first interactions. This is especially helpful in problem-solving scenarios like dealing with a tenant concerning late rent or a contractor/handyman who didn’t meet expectations. It steers investors away from anger, fear, and emotional responses. This hack ensures its users will also be following that oh-so-important “golden rule” when interacting with tenants, contractors, agents, managers, etc. Treating others the way you want to be treated isn’t just the right thing to do, it also means you’re much more likely to find reliable, responsible tenants and contractors who keep coming back to work with you. You’ll certainly have much more joy and sanity as you juggle it all.

Example

Sam’s new tenant’s first full month’s rent through ACH payment fails. His first reaction is to get upset, both with the tenant and himself, thinking he did a bad job of placing the tenant and that the tenant has already let him down. Then he reminds himself to “assume positive intent.” Maybe the tenant accidentally tied the auto-pay to the wrong account number, or maybe there was a mistake on the bank’s end. Assuming his renter has the best of intentions allows Sam to treat the renter with patience and kindness, hearing them out when getting to the bottom of the problem.

It turns out that Sam’s new tenant did not budget correctly for the first month’s rent. By assuming positive intent, he is able to communicate calmly and effectively with his new tenant, ultimately collecting the full rent and failed payment/late fees, while establishing rapport. His tenant then listens to him when he emphasizes how important prioritizing rent and paying it on time is and trusts that the consequences of not doing so will be handled swiftly and consistently each time (through late fees, notices, and eviction). He has no further issues with late payments from this tenant for the remainder of the lease. He’s trained his tenant, kept his cool, and behaved in a way he can be proud of.

Related: 4 Books to Help You Adopt the Entrepreneurial Mindset

What It’s Not

Assuming positive intent does not mean being naive, allowing yourself to be taken advantage of, or continuing to work with people who don’t have your best interests in mind. It just means your first interactions with others and your attitude during problematic situations assumes the best of everyone involved first. Act accordingly if you learn that some individuals don’t have good intentions (which is bound to happen).

unsuccessful-people

2. Play the long game.

Successful investors know that they’re in it for the long haul. They treat small setbacks and short-term issues as that—small. This also means they don’t make short-term compromises that will negatively impact the integrity of their long-term goals. Investors playing the long game don’t get distracted by every little squirrel that pops up. They keep their eye on the bigger prize.

Example

Lauren has a poor month of cash flow. One vacancy went on longer than expected, and another tenant turnover resulted in a $3,000 AC unit being stolen. She feels overwhelmed with fear initially, thinking her projections for her freedom number and for financial independence are off. She worries that many months of this type of hit in cash flow will keep her forever tied to her W2 income. Then she remembers she’s playing the long game. Like all investments, she knows to expect some ups and downs. She reminds herself that she’s prepared for instances like this by withholding for vacancies and CapEx expenses. She’s playing the long game, after all, so small setbacks here and there along the way don’t get her off course. She puts his head down and keeps pushing for freedom.

What It’s Not

Playing the long game doesn’t mean holding a property that continually has poor cash flow or causes more grief than it’s worth. By all means, get rid of those and move on. It’s also not getting sucked in by every “opportunity” that comes along—wholesaling, flipping, rentals, commercial, etc. Find your lane. Get in it. Get good at it and keep trucking.

3. You find what you’re looking for.

Things won’t always go your way, but they’ll go your way a lot more often if your words and actions reflect those that you’d like to see in the people you work closely with. If you’d like to work with griping, complaining, negative individuals, then by all means, gripe and moan it up. However, if you’d like to build a team of people who are dependable and practice integrity while filling your homes with the same type of tenants, then look for that. While you’re at it, be dependable and practice integrity by being honest, positive, and looking for the good in people and situations. A funny thing happens when you start looking for the things you want—you find them. Maybe not right next door, but at least down the street. Eventually, you see far more of the good and far less of the bad. Call out the good. Look for the good. Eventually, the good will come looking for you, too.

Example

Chris has had many conversations with other investors in his area, hearing many similar stories like, “The renters around here are awful. They’ll trash your house. I have to go knock on their door to get their rent.” Chris knows he doesn’t want that type of tenant. Because he’s playing the long game, he knows that whatever investment decisions he makes need to be sustainable for the long-term. He needs his real estate investments to lead him to freedom, not headaches. Terrible tenants, elusive contractors, or dishonest property managers certainly wouldn’t be sustainable or provide freedom, so he does his homework. He reads books, listens to podcasts, and learns about online communities like BiggerPockets. Chris sees and hears success stories and learns of ways to screen tenants to minimize issues. He finds free online resources to help collect rents through direct deposit into his bank account, saving time and trouble.

Communicating his expectations clearly with his tenants verbally and in his lease and impeccably following through with his word builds dependable, positive relationships. With some positive experience under his belt, he continues his search and conversations with other investors in his area. He begins organizing monthly meet-ups to share his ideas and learn from others. Eventually, he finds investors who think like him and have much better things to say about investing in rental properties. They become a resource for each other when they need advice. He didn’t give up until he found what he was looking for.

What It’s Not

You will not find what you’re looking for by lying around waiting for it to come to you. You will find it by clearly defining your goals and objectives, then taking action. You also won’t find what you’re looking for by standing around the coffee shop complaining about tenants, contractors, etc. Standing around any place griping and complaining will only help you find one thing: more people standing around griping and complaining. Just don’t do it.

4. There’s enough for everyone.

Successful investors don’t make decisions out of fear. Acting from a place of fear is never a good idea. Successful investors compete against themselves. They are their own toughest competition, and they continuously set goals and try to accomplish them. Because of this, they not only celebrate the successes of others, but they help others achieve their goals as well. That’s not possible if they’re constantly competing with the investor down the block, thinking the success of one means the failure of another. They know there is enough for everyone. There is enough money for everyone. There are enough deals for everyone. There is enough success for everyone. And a successful investor keeps looking until they find it. Knowing this allows them to make positive decisions from a place of confidence.

Example

Katie makes an offer on a distressed property in her area that recently came on the market. She carefully runs the numbers and submits a cash offer she thinks is fair and will allow her enough room to comfortably make the necessary improvements while maintaining a good return on her investment. Her real estate agent warns her she may have some competition, so she acts quickly and makes an offer. She then begins to doubt her offer, wondering if she should put in a stronger one. She’s afraid she’ll lose the house and the cash flow it could offer her.

Then she remembers she doesn’t make decisions out of fear. She was confident in her calculations and made the offer that was right for her. If someone else gets the property, that’s OK. There’s enough for everyone, after all. The next day, her agent calls her to let her know that several other cash offers came in at the same time. The bids kept getting higher and higher, and she lost the property. Again, she tells herself, “There’s enough for everyone,” and she plans to meet her agent at another listing later that afternoon.

She soon realizes losing the first deal means she has enough cash available to make a strong offer on this property that includes two single-family homes needing much less rehab and CapEx expenses up front. Her offer is accepted, and she’s under contract with a deal that will definitely beat the 1% rule. She learns later that she lost the other property to someone moving in from out of town. They sold their home in a much more expensive city to buy a home and live in Katie’s more affordable area. They’ll be rehabbing and living in the home with the cash they made from their sale in the bigger city. They could afford to make a better offer because it’s not an investment property for them. She’s grateful she didn’t allow her fear of missing out derail her. Trusting there’s enough for everyone meant she got a better deal. She’s happy for the people finding freedom from expensive, city living who will be fixing up a distressed property in her community and adding value.

Related: 5 Habits You Didn’t Know Were Essential for Landlording

What It’s Not

Believing there’s enough for everyone is not complacency. It’s not letting deal after deal pass you by because you’re afraid to take action. It just means that when do you take action, you do so confidently, knowing that if this isn’t the right deal, you’ll find another one. No deal will come knocking on your door. Figure out what you’re looking for. Do your homework. Take action. Repeat.

5. It’s not your house—it’s your investment.

Looking at your properties as your investments rather than your homes with help you do this. After all, you don’t live in them. Investments go up and down. They have gains and losses. Remember, successful investors play the long game. As long as your investment is cash flowing, small setbacks aren’t important. When you see your properties as investments, you remove emotion from decisions and problems. You can move forward with less fear and worry.

This helps you to not only expect some hiccups but anticipate and prepare for them. You also won’t take it personally when a tenant damages one of your properties or a contractor does something you’re unhappy with. Real estate investing requires working with human beings. Humans are not perfect. They make mistakes. They act in ways you may not agree with or appreciate. When a tenant or a contractor or a property manager does something that negatively impacts you or your business, don’t take it personally. Know that it has nothing to do with you. This will help you keep a level head, find a solution, and quickly move on. It will also ensure you’re able to reflect more clearly to find the lesson in the issue. Then do what you can to avoid it in the future.

Example

Jim gets a text from a tenant. She can’t find work, so she’ll be moving back home with family immediately and won’t be able to pay rent this month. It’s six months before the end of her lease. It’s the middle of December, and four inches of snow cover the ground. Jim’s first reaction is to get angry, taking it personally and wondering how someone could be so irresponsible. Then he reminds himself that it’s his investment, not his house. He has prepared for bumps in the road by withholding a percentage of his cash flow. He has a security deposit and pet fees to cover any damages. Jim wants his investment to be as passive as possible, so he assesses the damage, hires people to do the repairs, and actually has money left from the security deposit and pet fees to cover the vacancy expenses while he finds a better, more reliable tenant.

What It’s Not

Treating your rental properties as investments isn’t taking a robotic approach; it’s just taking things a lot less personally so you can move on quickly. Find a smart investment. Make it a place you’d want to live in yourself. Be impeccable about screening your tenants (or finding a property manager to do so), so that you can be as passive as possible after they move in. Then let go. It’s their home now. You can enjoy the cash flow and look for the next deal.

Try one of these hacks the next time you notice things may not be going the way you’d like. They might keep you moving in the right direction.

Let us know what you think in the comments below or share your own mindset hacks.





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The National Association of Realtors and its investment arm, Second Century Ventures announced the winners of its pitch contest and hackathon. BoxBrownie, an on-demand photo editing service for real estate, won the pitch competition, and KW Labs, the Keller Williams in-house software development arm, won the hackathon at NAR’s first ever Investment, Opportunity & Innovation Summit in San Francisco.



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Most investors are familiar with a traditional LLC but not its more useful counterpart, the series LLC. A series LLC is a unique form of limited liability company that provides protection from liability across multiple individual “child” series within each main “parent” series LLC protected from liabilities arising from the other individual series. Each individual child series is treated as if it were its own LLC for liability purposes.

Why is a Series LLC Better Than a Traditional LLC?

Traditional LLCs are just fine, and they’re useful entities to be sure. However, they do have their limits. That’s why we are such big fans of the series LLC—there’s no denying that its features make it a much wiser choice for the savvy, forward-thinking investor. The series LLC—or (S)LLC—offers anonymity, lawsuit protection, compartmentalized liabilities, and it may reduce operating costs and streamline administration. Here are the details on some of our favorite features of this increasingly popular entity.

The (S)LLC Allows You to Own More Than One Property

A traditional LLC is a tried-and-true method for managing a single property. However, the series LLC model allows you to create a “child” company for each individual asset. This structure is limited only by the number of properties you choose to own. Maybe you only have one property right now, and the traditional LLC seems like it would do you just fine. We encourage you to think more long-term about your goals as an investor. Even if you’re 80 percent sure you’re going to be a one-and-done investor, why limit yourself when you can leave your options open at no extra cost? That leads directly into the next great feature of the (S)LLC.

Related: The Pros & Cons of Using a New LLC for Every Property Purchase

Infinite Scalability Lets You Grow Your Business Forever

With the series LLC, creating a new “child” LLC is simple. When you decide to add to your portfolio, all you do is generate a brand new LLC underneath the parent corporation. It takes about as much time as sending a Christmas card, and even better, you can do it from your home computer. The series is a private document that you create on your desktop, sign, and store in your safe.

Compartmentalization Offers The Best Asset Protection Plan for Investors with More than One Property

You’ve probably heard the old adage about not putting all of your eggs in one basket. The (S)LLC essentially allows you to give each “egg” (or property) its own basket. Oh yeah, and  those baskets aren’t your grandma’s wicker baskets. We’re talking about 100 percent solid steel boxes reinforced with concrete with a big-ass moat full of vicious alligators and flesh-eating piranhas swimming around the perimeter. That’s the level of security the structure provides.

Since each asset is isolated in its own series, should you ever be sued personally, your property will not be vulnerable to seizure. Assets are isolated for liability purposes, meaning lawsuits are often fruitless. The axiom that you can’t get blood from a stone is illustrated well here. Without anything to truly gain, most people aren’t going to try to sue you in the first place. Lawsuits are expensive. Who would want to pay their lawyer more than they could ever win? We’re sure there are some people who are extravagantly wealthy and so persuaded by pure spite that they might consider trying to come after you, but either we’ve lucked out and never met them — or the series LLC structure has kept them away from us and our clients.

Related: Yes, You Absolutely SHOULD Use an LLC to Invest in Real Estate: A Counterargument

Anonymity: So Much Easier With The (S)LLC

Anonymity is perhaps the most critical piece of your asset protection plan. Even if your assets are valuable, they are insulated in their own series (those steel boxes we mentioned above) so one has nothing to do with the other, and none have anything to do with you personally. We simply cannot say this enough to our clients or fellow investors: Anonymity stops lawsuits before they even start. Why? Nobody can successfully sue you or hold you liable for property that they cannot prove you own.

With these features, the series LLC is an excellent choice for real estate investors or anyone who needs a solid asset protection system. We recommend them a lot because the tool is as versatile as it is useful. We’ve seen it make and keep people very rich. Could the series LLC be the first big step you take in building your investment empire? Keep checking out our articles and other writing on the subject to learn more.

What do you think?

Do you have experience with a series LLC? Share your experience below!





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Just four months after putting itself up for sale, Pure Multi-Family REIT is taking itself off the market. Following an unsuccessful courtship process with 86 potential buyers, the Canadian real estate investment trust, which invests in institutional quality U.S. multifamily real estate assets, is embracing the solo life, for now.



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As a real estate agent for close to 30 years, I realized early on that many people make their biggest mistakes with real estate between the ages of 25 to 35 years old. Our working years really take place between 25 and 65 years old, and I believe the decisions we make in the beginning towards home ownership often dictate our future financial outcome as we sprint forward towards retirement.

What Happened to My Down Payment & Closing Costs?

If you think about it, most young people first try to rent as much property as possible, and then they try to buy as much property as possible. Is it the overachiever in each of us, or are we just trying to impress our family and friends? Maybe we simply feel we deserve it.

Next, we often listen to our real estate agent when it comes time to moving up to our next home. They may encourage you to sell the first home, saying that you can’t afford two mortgages, but they may be squeezing you into as much home as possible on the next purchase. After all, we all have to keep up with the Joneses. Keep in mind, most real estate agents aren’t accountants or financial advisors.

Related: How to Create a Diversified (Yet Still Manageable) Real Estate Portfolio

If things are going well for a nice couple, after they’re in their second or third home, their accountant might tell them it’s time for a rental property or a beach home. The accountant might say that they could use more write-offs; they’re making too much earned income, and they could use more deductions.

But what’s really wrong with this picture? Do you see where the real estate mistakes were made early on?

thrifty-deals

Against the Herd: A Different Approach

Let’s say you took a different approach, like I did when I was young. I didn’t even realize what I was doing until much later, and I majored in accounting in school. I took a more conservative approach after graduation.

First, I lived at home for two years to save up some money. Then I rented the most affordable apartment I could so I can save more money for my first house. I didn’t really care what my friends or family thought; I was on a mission, and time was of the essence.

Then I bought my first duplex, owner-occupied, and it needed fixing up. But here’s the real difference: When it was time to move to the next property, I kept it. There were no stressful moving days for me. And guess what I did when I moved the next two times? I kept them as rentals, too. Now, let’s look at the real impact of doing that.

Advantages of Keeping Your Primary Residences

First of all, I had lower down payments and more favorable interest rates because I purchased these homes owner-occupied. I also purchased properties, which I could rent out for more than my mortgage payment. So now, I never really lost my down payment and closing costs because I kept them all. Most people forget about this real money that they spent to acquire a home. Seems like they just look at the monthly payment, much like they do when buying a car.

Another thing that’s overlooked is the time spent in the property, paying towards a 30 year mortgage before it becomes a rental. My first property I lived in for five years, my second property was two years, and my third property was 13 years. That was 13 years of payments towards my 30-year loan. Today, my mortgage payments are mostly principal, and my tenants are buying them for me.

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Related: 3 Negatively Cashflowing “Assets” That Devastate 20-Somethings’ Finances

Sure, it took a little more time to save money between moving up with my primary residences, but it was well worth the wait. My properties enabled me to build additional wealth, and they’re almost paid off now. They not only give me depreciation and write-offs to offset earned income, but they can pay for things like college and weddings, and they provide a nice, passive cash flow in retirement.

As you can see, this has been one of the best investing strategies that I’ve taken in my entire life. It makes you wonder why this strategy is not taught more or is not more popular with young people starting out.

We’re republishing this article to help out our newer readers.

So, let me ask you, “Was selling your primary residence a mistake?”

Let me know your thoughts with a comment!





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