So, to start out, I live in a pretty great but weird place in the NC Outer Banks. I live on a barrier island just across the sound from the main land. The island has a very "beach resort" feel to it, and it is a huge vacation destination (population goes from 3k in the winter to >50k in the summer). However, as soon as you go over the bridge to the mainland, you enter very rural farmland, where land is cheap and the economy is very depressed.
I just managed to land a job that will allow me to stay here permanently (it's where I grew up and my parents still live, I don't want to live anywhere else). My parents are real estate agents, and also own 2 vacation rental properties which I help manage. One of the properties was purchased for $439k and averages 48k gross rental income per year. The other was purchased for 400k and has had about 100k put into it. Next summer will be its first and it will clear over 60k. So clearly vacation rentals in this area are a very solid investment.
Here's the deal: real estate around here is about to start jumping up in price. I'm a data scientist, and I've run all the numbers myself. We're seeing strong signs that the market is beginning to recover from the 2008 crash (since we are mainly an investment and 2nd home market, the recovery has been very slow). Now that I am gainfully employed, my dad is pushing me to consider buying a rental property of my own before the price increases. I am very familiar with the landlord game because as I've said, I do most of the management of my parents' properties, so it would just be one more. Very doable.
However, I am also a lifelong equestrian. It has been my dream since I was a little girl to own my own land and keep my own horses. (Right now my horses are boarded.) I can buy land over the bridge (~20 minutes away) incredibly cheap; I'm talking 15 or 20 acres under 100k. I would want to buy it and sit on it, then slowly build stuff (barn, arena, house eventually) until I move out there with my horses at some point in the future.
So that's my dilemma. Buy a rental house (probably around 450k), and put off buying land for quite a while as I'm paying that down. Then I have an income stream through the rental, but all that time I'm still paying ~$650 a month boarding my horses. And I risk that land will go up in value in the future and I'll get less bang for my buck.
OR, I buy the land, pay it down quickly and build improvements, and eventually eliminate that $650 a month (and likely turn it into a net profit, as I would take a few boarders myself). Then in a couple of years, buy the rental property (gambling that the market doesn't rise up so fast that I get priced out).
I will not have a problem getting a loan, as my credit is perfect, my income is good, and my parents are willing to co-sign. Even if all else fails my parents have said they can give me a loan themselves. So I'm not worried about that (even with land, which is much harder to get a loan on).
The selfish part of me wants to buy the land, and start building my dream farm, but the logical part of me really believes the market is going to improve, and this might be my last chance to get in on the ground floor.
Does anybody have any advice, or anything I'm not thinking about here?
Submitted February 10, 2018 at 10:08AM by trucksareforgirls http://ift.tt/2CbWObx
