Let Other People Pay for Your Retirement

[alctel]

I'd never be able to afford a house for myself to live in, let alone for rental purposes.

One of the reasons I live on a boat!

[Phisher]

We are checking out on 10/1!! I thought I was ready 5 years ago, made an emotional and ignorant purchase of a boat and realized I was not ready financially. So I bought another restaurant (its what I'm good at really good!) in 2011. Worked my ass off for 4 years, purchased 2 more properties paid them off in 2 years. Business is sold and I will be carrying some paper to add to my monthly income. With rental income alone after taxes, insurance and money i put aside for repairs we will clear 4k a month. I still have $1,200 an month for 7 years on the sale of my first restaurant which I never touch, it buys quantity dividend yielding stocks,with the dividends being reinvested. My wife and I live well below our means and have zero debt. We will go to Brazil and spend some time with family and friends, when we return we will buy our boat.
A close friend died last July, 52 years old. I told my wife at his funeral we were selling the business and moving forward with our plans to cruise. Tomorrow is not guaranteed my friends!!! If I have to go back to work at some point, no big deal!! I know what I'm good at and I'll just do it again!
This is my plan to finance the rest of my life.
Brian

[thomm225]

Originally Posted by Kenomac

You're absolutely right, I'm only in it for the entertainment and to earn as much cash as possible. You got me all figured out. Congratulations!

Awesome.

Isn't it remarkable that we are all doing the same thing whether we are working or cruising..........

[darylat8750]

Originally Posted by Siberianhusky

I just did the math on this thinking about doing the rental thing.
By the time I pay property taxes, income tax on the money I bring in as rent, repairs, insurance etc. I make more money at the end of the year investing the money from selling the house and living on dividends.
Then there is capitol gains on the property when you go to sell it unless you make it you primary residence for 1 year before you sell it.
Just taxes and insurance would have sucked 4000$ off the top.
Then there are the risks which I was unwilling to take. In Canada the property owner has no rights, the legal process to get somebody out of your house can take a year even if they have never paid rent. Once they are in you're screwed! You have no say, rent out a non smoking house and they smoke - too bad. No pets and they start a ferret farm (true story) you're screwed. That house was condemned after the owners got the tenants out, happened just down the road from the house I sold!

There are areas in which only the very hard will try the landlord thing. My good friend has had rentals in good neighborhoods and still once in a while it gets ugly. It took him over 8 months after one guy stopped paying before he finely got him out of the apt. And the apt was trashed.
After that happened I ran across a guy in Isla Mujeres who had a business getting dead beats out of property in London. The legal system apparently takes over a year of no payment and many lawyer "billable hours" to force someone out. He was large, kind of cross wired and intimidating. He and a couple of his friends would just move into the property! Eat their food and hit on the wives/daughters. Why shouldn't they stay there for free just like the other freeloaders? The squatters can hardly call the police and say free loaders shouldn't be able to stay here. He said it never took more than 2 weeks and the place emptied out.

[Smokeys Kitchen]

Originally Posted by Kenomac

You're absolutely right, I'm only in it for the entertainment and to earn as much cash as possible. You got me all figured out. Congratulations!

Awesome post Ken; I remember her from the film!

BTW - great thread; just getting ideas out there to help folks figure out how to go cruising quicker! Not to say that's the way for everyone (renting out property), but sometimes a suggestion from someone else who's thinking out of the box can be a big help.

[lilbabypenguin]

Enjoying this thread for sure. We are in a similar situation, but smaller. My boyfriend and I each have 1 rental house that is completely paid off. I've been fortunate to not have any issues with tenants in the 5 years I've had the house. We are not big spenders at all, and live well below our means. I own a business (that I built from the ground up working my behind off for the last 8 years), and I drive the cheapest car of anyone there! It's always been in my nature to be mindful of the money I do have, I got that from my parents luckily.
To me money=time. Time= freedom. And I want my freedom!
We have friends who are in the rat race, always buying the newest and best of everything. And that seems to be satisfying for them. It's all comes down to priorities, and ours are to live simply, and freely.
Getting closer every day! 😊
I hope my post doesn't sound offensive or braggy. Honestly I just find it exciting to make a goal and work towards it, and when it's finally coming into to view it's just a great feeling. I'm sure many cruisers can relate. That's one thing most of us have in common.
I love to read about others peoples plans on making their dream happen.


Sent from my iPad using Cruisers Sailing Forum

[MarkJ]

Originally Posted by Phisher

A close friend died last July, 52 years old. I told my wife at his funeral we were selling the business and moving forward with our plans to cruise. Tomorrow is not guaranteed my friends!!!

Far too young. Glad you got the point at a very sad time.

Good luck



Sent from a stupid phone that replaces words with weird stuff.

[Kenomac]

Originally Posted by lilbabypenguin

Enjoying this thread for sure. We are in a similar situation, but smaller. My boyfriend and I each have 1 rental house that is completely paid off. I've been fortunate to not have any issues with tenants in the 5 years I've had the house. We are not big spenders at all, and live well below our means. I own a business (that I built from the ground up working my behind off for the last 8 years), and I drive the cheapest car of anyone there! It's always been in my nature to be mindful of the money I do have, I got that from my parents luckily.
To me money=time. Time= freedom. And I want my freedom!
We have friends who are in the rat race, always buying the newest and best of everything. And that seems to be satisfying for them. It's all comes down to priorities, and ours are to live simply, and freely.
Getting closer every day! ��
I hope my post doesn't sound offensive or braggy. Honestly I just find it exciting to make a goal and work towards it, and when it's finally coming into to view it's just a great feeling. I'm sure many cruisers can relate. That's one thing most of us have in common.
I love to read about others peoples plans on making their dream happen.
m

Yo penguin,

You're doing everything right, just ignore what some of the Bernie supporters say. Keep up the excellent work!

Presently, my daily driver is a 2002 Dodge Neon with 170k miles on it, or I can look like a gay doofus and drive my wife's hand me down baby blue 2004 VW Bug convertible turbo with 165k miles. But when ever I can, I drive a Ferrari 308 GTSi I bought 35 years ago when I was in the music entertainment business. All old cars, paid off long ago.

Freedom = not having any payments, especially on depreciating assets.

P.S. Most of the time I can be seen driving around in the Bug chipped to 240hp with traction control.

[Dreams]

Speaking personally it's because I feel an obligation to my child. I live in the UK, in the South East to be more specific where a 2+1 bedroom terraced house costs £350,000 (USD 507,500). As many of you will grasp, this means that the chances of my child purchasing a house herself without parental support is quite low, 1) it would require her purchasing the house with a partner and 2) even after purchasing the house they'd be living from hand-to-mouth for years.


Also, I can't see my wife living the liveaboard lifestyle yet, she may, but it will take some persuading and she would always want a base on dry-land to return to.


So yes technically I could sell up tomorrow and do it, but I don't feel I can for the reasons I've outlined above.


For those of you from the UK who intend to rely on rental income, take advice on the tax rules, they've recently changed.


(PS 2+1 bedrooms means there are 2 bedrooms of a proper size and 1 little bigger than a boxroom)

[Sea Dreaming]

Originally Posted by Siberianhusky

I just did the math on this thinking about doing the rental thing.
By the time I pay property taxes, income tax on the money I bring in as rent, repairs, insurance etc. I make more money at the end of the year investing the money from selling the house and living on dividends.
Then there is capitol gains on the property when you go to sell it unless you make it you primary residence for 1 year before you sell it.
Just taxes and insurance would have sucked 4000$ off the top.
Then there are the risks which I was unwilling to take. In Canada the property owner has no rights, the legal process to get somebody out of your house can take a year even if they have never paid rent. Once they are in you're screwed! You have no say, rent out a non smoking house and they smoke - too bad. No pets and they start a ferret farm (true story) you're screwed. That house was condemned after the owners got the tenants out, happened just down the road from the house I sold!

I cant relate to the ferrets but you have outlined reasons we wont do the rental route. My bf had a rental for years but he barely made even. I think that its a sound idea for some, in some places, but it does not always work everywhere for everybody.

[Kenomac]

Originally Posted by Sea Dreaming

I cant relate to the ferrets but you have outlined reasons we wont do the rental route. My bf had a rental for years but he barely made even. I think that its a sound idea for some, in some places, but it does not always work everywhere for everybody.

One can't expect the rental to be earning money from the date of purchase, you really need to be thinking long term. Our property went through many changes over the 21 years since purchase. It was a total wreck that nobody else wanted, so we were able to purchase it cheap. Then I cost us over $700,000 for rennovations, construction and repairs over a fifteen year period. I know I have at least 10 years of full-time work into the place, plus the work continues.

But now twenty one years later, it's starting to pay off. We couldn't afford to purchase a rental property in an expensive or nice town, ours is basically in "the hood." There're opportunities everywhere.

"When's the best time to plant a tree?" Answer: "Twenty years ago."

[Kenomac]

Originally Posted by Dreams

Speaking personally it's because I feel an obligation to my child. I live in the UK, in the South East to be more specific where a 2+1 bedroom terraced house costs £350,000 (USD 507,500). As many of you will grasp, this means that the chances of my child purchasing a house herself without parental support is quite low, 1) it would require her purchasing the house with a partner and 2) even after purchasing the house they'd be living from hand-to-mouth for years.


Also, I can't see my wife living the liveaboard lifestyle yet, she may, but it will take some persuading and she would always want a base on dry-land to return to.


So yes technically I could sell up tomorrow and do it, but I don't feel I can for the reasons I've outlined above.


For those of you from the UK who intend to rely on rental income, take advice on the tax rules, they've recently changed.


(PS 2+1 bedrooms means there are 2 bedrooms of a proper size and 1 little bigger than a boxroom)

Personally, we felt an obligation to make sure our children were properly educated, and both had the opportunity to attend the university and graduated with a bachelors degree.

Our job was finished regarding financial outcome for the kids when the youngest graduated. Now it's up to them to make the best of what they were given. We feel no obligation to buy either of them a house, nor do they expect us to co-sign for any credit.

If your children can't afford a house nearby where they'd like to live, suggest they move to a cheaper more affordable area, or rent a place. It's not your job to properly house and support adults because they don't earn enough.

[SV THIRD DAY]

The key that let us cruise off of our Renters monthly rent payment was that the house was paid for. After we took out property taxes, insurance, and income tax on the rental, we still had $1200/mo left over. But if we had to pay a mortgage...then forget it. The rental income game in retirement or cruising assumes, I believe, a paid off property.

Having a daughter graduating from High School tomorrow and a son starting his Sr year in high school next year, I feel that my financial responsibility is similar to Kenomac. We have always told the kids that we will pay for their BA/BS 4yr degree to whatever school they want or could get into with everything covered, books, car, car insurance, money for clothes, etc. Literally everything. All they have to do is bust their asses in school to take full advantage of not graduating with $100K in student debt like so many these days.

But, isn't there always a but...
They are not on the 5-7yr plan, they can't take gender studies or underwater basket weaving (sorry...only paying for a real degree) and I will see their grades to make sure its just not a party.
When daddy pays...daddy has a say.

They will work during collage and that money is their fun spending money and money to be saving so that when they graduate they have some transition money because that's it. Once they graduate the Bernie Sanders daddy ride of free is over and it's time to make their own way in the world. If they want Grad school or education past the 4yr BA/BS degree, then that is on them to pay for. No moving back home on the boat (because it will be gone) and the financial support ends. Houses in this area start at $500K, so if they want to live here on the Central Coast of California and be house poor, that is their call. Or they can move to a more affordable location, they can buy a boat and live aboard, or they can be bums living under a bridge with a Bernie sticker on their napsack...it's their call and their live to make at that point.

[CSY Man]

Rentals are a great idea.
Did it in Fort Lauderdale when real estate prices took a big dump, 2009-2011.
Bought 6 units: 3 condos and a house with 3 apartments. (TriPlex)
Rented out two units fully furnished with power, wifi, everything to yacht captains, engineers and stews. Clean responsible people.
Rented condos to regular folks on 12 month leases.
My house was paid off so I used some of the equity to buy properties for.
Sold most of it now @ 2 and 3 times what I paid for. Used the rent money to pay off the properties and took tax deductions for being a landlord.
Made a ton of money and highly recommend, but I was lucky with market timing. (Buy low, sell high)
Never had tenant problems, and if some had refused to pay the rent, I would have gone over with a baseball bat and have a man-to-man talk. (Sure they can call the police,, but I am not trespassing, my property and the tenants are not renting anymore, they are trespassing because they are not paying rent)
The secret is to live close by and always have a tool kit in the trunk of your car, do the yard work yourself, etc.

[IdoraKeeper]

Originally Posted by Kenomac

Personally, we felt an obligation to make sure our children were properly educated, and both had the opportunity to attend the university and graduated with a bachelors degree.

Our job was finished regarding financial outcome for the kids when the youngest graduated. Now it's up to them to make the best of what they were given. We feel no obligation to buy either of them a house, nor do they expect us to co-sign for any credit.

If your children can't afford a house nearby where they'd like to live, suggest they move to a cheaper more affordable area, or rent a place. It's not your job to properly house and support adults because they don't earn enough.

I am just starting a week at work......you have escaped from the nut house. My heart just leaped when I saw your post..I thought you were offering to subsidize my escape as well. Imagine my chagrin on reading the thread.