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You joke, but storage units are money makers, seriously, especially if you live in an area of college or military. Go for it.
I'm involved with storage units and they can be fantastic...
The downside is they are sometimes difficult to get building permit approval in part because they do not add jobs once the unit is built... at least this is the reasoning some California Cities are using..
Years ago, I used to buy foreclosed and dilapidated houses, fix them up, and then rent them out. In retrospect, I wish I had just fixed them up and sold them...or at least sold them after owning them for 1 year (for long-term capital gains tax treatment). Some landlords can make it work, but even if you only have one bad tenant out of ten, that will sour the experience entirely. It's just an aggravating way to try to make money. The overall market is down now, but it seems that there are some good possiblities to buy, fix, and flip properties. Selling is a challenge, but as long as you can get a really good deal to begin with, such an endeavor could be worthwhile.
Like any real estate project, the game is in the numbers. What kind of return are you looking to get? How long are you planning on owning this building? How many units? What is the yearly rent? How strong is the rental market? What are taxes like? What type of financing are you going to use? What kind of cash reserves do you have? What kind of rental unit are you going to market? Are you going to buy an apartment that is already leased? What type of zoning are you working with? What is the age of the building? What are competitors leasing at?
I'm sure there are other questions we can ask but this will get you started.
...........Would I make more profit if I did vacation rentals in summer/winter or if I would just rent it on long term?.............?
I'm having a difficult time picturing an apartment building as a vacation rental, unless it is a very expensive, high demand area. That might work in Waikiki, but I can't think of any other place right off the bat.
People on vacations want an upgrade from their day to day life. They don't want to live in an apartment for a week. They want a cottage on the beach or something with a trout stream in the backyard or a place right next to the ski slope..
Maybe, in a high cost vacation area, you might be able to rent out apartments by the week, if they were large apartments, luxuriously furnished, with exceptional landscaping, so that they appeared to be luxury condos or a high end hotel.
There might possibly be some local laws about renting out apartments just for vacations. You might fall under the hotel laws for your area. Extra taxes and whatnot and there might be zoning issues.
Would I make more profit if I did vacation rentals in summer/winter or if I would just rent it on long term?
What are the risks?
I own a beachfront condo and they have a specific clause in the rules that rentals must be for 6mos or longer to avoide short term rentals in the summer for a week or two.
Years ago, I used to buy foreclosed and dilapidated houses, fix them up, and then rent them out. In retrospect, I wish I had just fixed them up and sold them...or at least sold them after owning them for 1 year (for long-term capital gains tax treatment). Some landlords can make it work, but even if you only have one bad tenant out of ten, that will sour the experience entirely. It's just an aggravating way to try to make money. The overall market is down now, but it seems that there are some good possiblities to buy, fix, and flip properties. Selling is a challenge, but as long as you can get a really good deal to begin with, such an endeavor could be worthwhile.
I'd fix 'em up and flip 'em too, if I had a real estate license to broker my own deals and avoid paying an agent.
Whats is a better investment Storage Units or Apartments?
This is an interesting question. But, as always, it just depends. What's the demand for either?
The upside for storage units, is they can be self-serve, with no on-site manager, for the lower end ones. There aren't any fair housing laws. I think it would be easier to "evict" someone - or rather their stuff. Probably less damage to worry about, so less cost to turn them over.
I'd personally rather manage storage units, than deal with tenants.
I have thoughts of buying an appartment in an attractive place, fixing it and renting it out.
Would I make more profit if I did vacation rentals in summer/winter or if I would just rent it on long term?
What are the risks?
Yeah as others have said, the vacation rental route is a bad idea for an individual investor. You’re going to be doing a lot of work because it’s an ongoing process where your constantly keeping up with the place.
Long term rental is a different beast altogether. As long as you buy a place that is middle class or higher (to attract better tenant) you will make a good profit with minimal hassle. The last unit I bought was just the end of last month. I will be getting a 10% ROI on this place. And that’s before counting the depreciation deductible on my taxes. Also I sell my condo’s as they get old so in about 7-10 years when I sell this place I should make even more profit from the appreciation.
I screen my tenants, make iron clad contracts and know the process for eviction inside out so that minimizes the chance of getting a bad tenant. I also have a home warranty service on the place so if the tenant ever has anything break down, I don't even have to deal with it. So basically if you do your research, have money to make outright cash purchases and screen your tenants well; it’s almost a passive source of income with very little to do on your part.
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