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Old 07-12-2021, 16:26   #1
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Real Estate Stake While Cruising - Are you in or out?

We are getting ready to go cruising again and I'm curious how many of you full time cruisers have maintained a stake on land or have you just cashed out and will worry about it when you return? Our biggest worry is if we sell is inflation (due to COVID money printing) and not being able to afford to get back in the market when we decide to be lubbers again. I am taking early retirement (55) and our problem is we have too much equity tied up in our home. We have been looking at downsizing but the market is so picked over (and IMO, overvalued), I am almost at the point that we just sell, go cruising and cross our fingers that some sanity will return to the housing market.
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Old 07-12-2021, 18:37   #2
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Re: Real Estate Stake While Cruising - Are you in or out?

It’s so specific for each individual. Only you know what’s right for you. For us, we sold because the real estate taxes were so high where we lived (Connecticut) that if we had rented our house we wouldn’t have made enough each month to make the headaches worth it. However, we also knew we would never live there year round again once we were finished cruising. If one of those two scenarios were different (good monthly profit or living there when we swallow the anchor), we might have held onto the house.

Do we regret it? Not enough to wish we had done it differently. YMMV.

Will sanity return to the housing market? Of course. It always does, despite how it may feel at the moment.
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Old 07-12-2021, 19:20   #3
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Re: Real Estate Stake While Cruising - Are you in or out?

[QUOTE=

Will sanity return to the housing market? Of course. It always does, despite how it may feel at the moment.[/QUOTE]

Yeah, I wouldn't be to sure about that, and I most definitely would not bet on it.
20 years ago I said the same thing about aus. A place I sold back then for $320g would easy sell now for 1.2 million. Uh huh....different country, different place blah blah blah, same bad stuff that was forming up then and there is most definitely forming up right here right now. Most just cant see it......because they haven't seen it happen.

You have to try real hard to lose money on real estate!

Best of luck whatever you decide.....but don't bet on another 08.
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Old 07-12-2021, 19:31   #4
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Re: Real Estate Stake While Cruising - Are you in or out?

I am not cruising yet, but when I retire I will keep something on land. I think everyone has been waiting for sanity in the housing market for many years, but in the markets in which I have been involved there hasnít been a significant down turn in decades. Our house has doubled in value in the last ten years which is not exceptional. It just means that unless you get lucky and there is a downturn, you might not be able to afford to live where you want when you stop cruising.
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Old 07-12-2021, 20:01   #5
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Re: Real Estate Stake While Cruising - Are you in or out?

We have a 4 apt brownstone in center city Philadelphia where we lived until 2016 when we retired. We paid off the mortgage that year and rented out iur apartment and got a property manager. The manager was a mixed bag. He would collect rent but really did nothing to care for the building.

This year a 19 year tenant moved out of the big apartment, which now needed a lot of work. Being stateside due covid we figured we would do a renovation. The renovation got big and we realized we had no desire to ever return to Philly again. Prices are high so we decided to bail. We accepted a nearly full price offer before the house went in the market. This was a blessing because some health issues have now come up and we don’t need the hassle.

Our sense is the market is in a bubble. We are in no rush to return to land living anytime soon, we are very comfortable live aboards.

We will buy something for eventually when the need arises. It will be very downsize from what we had.

I am not against having a rental property, finding someone to manage it is the issue. And also our property, being in a big center city, is exposed to riots and looting. It is a great neighborhood as ling as things remain civil. But we had stores all around us looted during the riots.

On the plus side we have always had good quality tenants in THIS location. We have had other rental properties in different locations with much different results.

It is all something of a crap shoot; too many variables to generalize.
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Old 07-12-2021, 22:29   #6
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Real Estate Stake While Cruising - Are you in or out?

Iíve done well with short term rentals. tripled what I was making compared to long term rental. keep it if the property is somewhere that Tourists visit.

There is a model if you want more detail.
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Old 08-12-2021, 00:52   #7
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Re: Real Estate Stake While Cruising - Are you in or out?

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Originally Posted by Allied39 View Post
Yeah, I wouldn't be to sure about that, and I most definitely would not bet on it.
20 years ago I said the same thing about aus. A place I sold back then for $320g would easy sell now for 1.2 million. Uh huh....different country, different place blah blah blah, same bad stuff that was forming up then and there is most definitely forming up right here right now. Most just cant see it......because they haven't seen it happen.

You have to try real hard to lose money on real estate!

Best of luck whatever you decide.....but don't bet on another 08.

If you invested $320g it in a stockmarke fund matching the performance of All ordinar
ies acummulation index 20 years ago you would now have $1724800.
https://www.noelwhittaker.com.au/res...et-calculator/
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Old 08-12-2021, 04:53   #8
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Re: Real Estate Stake While Cruising - Are you in or out?

I moved to Florida in 2005 just in time to buy a house that greatly reduced in value within 2 years. Worse, it was built in 1938 and badly in need of freshening (it was all I could find in my price range at the time). I slowly remodeled it over several years.

When Covid hit, I expected another 5 year drought in the market as happened starting in 2007. So while locked at home, i finished rhe last of the upgrade projects just in time to be proven wrong about Covids effect on the market. I sold the house this past April for 15% above asking, about 3x what I paid 16 years earlier (though with considerable improvement costs)

I could not afford to live in that house now - Florida has a homestead exemption in taxes so my taxes were pegged to 2008 (low point) and rose only a percent or two each year since then. If I were to buy the same house, taxes would reset to the sale price. I guess I could afford it, but would not be willing to write the check each year.

But......in 2011 and 2013, we purchased two properties at very low prices. One a small house, the other a condo with a deeded dock on the ICW. The condo does a decent VRBO rental business plus free moorage for our boat. The house is now our home base. Holding costs are quite low, though requires a substantial lifestyle adjustment as it's less than half the size of the house we sold. We got lucky - having a second house (which we also remodeled ourselves, then rented out) provided a safety net when we sold our primary house, though was far from a certain investment when we purchased, and has carried considerable cost over the years that was only partially defrayed by renting out.

We are both 60-ish and about to retire. Plan is to cruise on/off indefinitely. We enjoy travel and our trawler will be one of several magic carpets.

OP is wise to consider cost if reentry. Unless you're currently living far below your means, chances of reentry where you left off are much lower than 50/50. If that's not comfortable for you, don't do it.

My dad used to say "don't let your possessions possess you." I've struggled with that these last 20 years as I've accumulated too much stuff. We're in the midst of striking a balance of house and cruising with a race against a clock. Selling our house was a really nice financial jolt that is quite liberating.

If to love your house and don't mind the work snd expense to keep it alive, you are at risk of regret. Me? I really started to resent the work it took - a huge distraction from what I wanted to do. All I can say is we will not be able to return to where we left off, but have hedged a bit with much smaller land holdings that are affordable for us

Good luck with whatever you decide.

Peter.
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Old 08-12-2021, 05:01   #9
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Re: Real Estate Stake While Cruising - Are you in or out?

We sold the house and bought a rentable condo and a cheaper boat than we might have bought, we then sailed for 11 years. Six months ago we sold the condo and with the proceeds we then bought a condo worth twice what we paid for the first condo with a mortgage payment of 2/3rds

If we had not done what we did we would be living in a cheap 2 bed instead of a very nice 3 bed on the water.

Leaving the property market is a big mistake, you trade an appreciating asset for a depreciating boat.
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Old 08-12-2021, 05:27   #10
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Re: Real Estate Stake While Cruising - Are you in or out?

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Leaving the property market is a big mistake, you trade an appreciating asset for a depreciating boat.
The classic balance of this compared to "you can't take it with you!" I think a lot of it depends on family situation. When I was delivering, I specialized in teaching deliveries. My typical clients were in their late 50's/early 60's with a decent nest egg, often from sale of a business. Kids' college was taken care of. "Honey, let's buy a boat!" By far, the most common inhibitor to cruising was grandchildren. Next was aging parents. Or both. Those are strong reasons to maintain a parental homestead.

On the flip-side, there comes a point in life where you can't ignore the fact there's more highway in the rearview mirror than the windshield. For many who have had some luck and/or planned reasonably well, currency of life changes from money/assets to time/experiences.

When you're old, decrepid, and confined to a wheelchair with a bag hanging off the armreset and drool tracing down your chin, what will your last lucid memories be? A nice house you owned, perhaps the holidays? Or the places you traveled?

Tough choice. Like Moondancer, I hedged a bit - scaled-back both to be concurrently affordable. But also know I cannot return to the relatively large house I just sold. Works for me.

Peter

EDIT - I re-read OPs post and apologies for response as he asked for full-time cruisers to respond. We are about 6-mos away from full-time cruising so responded how we are preparing. It's been a 10-15 year journey, mostly because we both enjoy our work. Also, I note the OP is in British Columbia, home to some of the most expensive neighborhoods in North America. We moved to Florida in 2005 from San Francisco where we still have a condo which we kept for fear of not being able to return due to being priced-out of market. We no longer aspire to return, so will likely sell it in the next year or two.
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Old 08-12-2021, 05:30   #11
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Re: Real Estate Stake While Cruising - Are you in or out?

We retained one property (UK) while away sailing; nothing special, but it was in the area that we anticipated was the most likely that we'd return to, if indeed we ever did return to shore.
I've seen the posts advising that the equities markets would have been a far better investment over the last twenty years than property, but we chose that option when we went travelling in the late 1980s and over three years the opposite proved true. I'd agree that the markets will 'almost certainly' do better over any twenty year period, but you might get burned if you need to return to dirt dwelling earlier and as we've discovered, you may not be able to choose the exact moment that happens. If at least some of your money's invested in the object that you want it for - one residential property - then irrespective of equity, property or any other market, be that local/national/international you will always at that moment have the value of one residential property in the rightish area; subject to getting the tenant out, you can even go live in the one you already own.
Sailing across half the world, we've met cruisers everywhere who through age, ill health, changing family circumstances or simply boredom don't really want to continue with the lifestyle, but due to the decisions they made when it was the life for them, now cannot afford to return to living ashore in their homeland or indeed anywhere else.

PS: To achieve our aim, we bought a smaller/cheaper boat than many and effectively wrote off its value with regard to any future/old-age plans. We've often heard and indeed seen on this post the 're-sell the boat to buy the house'; as has already been noted the boat's a depreciating asset, while residential property prices invariably rise and again it might be the timing/location that gets you: Your boat may be worth x hundred thousand $/£/€ in home waters, but what if you need to sell it in the boondocks? Especially if you're already thousands of miles away from it.
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Old 08-12-2021, 05:53   #12
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Re: Real Estate Stake While Cruising - Are you in or out?

If the plan is to go cruising for 6-12months, sure, keep the house.

If it's open ended and you expect to be gone years, set the real-estate money aside in an investment and buy when you return.
- You may never return to land.
- You may decide to live somewhere else.
- You don't have to pay taxes and maintenance on the house.
- Rental of your primary home is a sketchy. Far different from buying a property purposely to rent out.
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Old 08-12-2021, 07:03   #13
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Re: Real Estate Stake While Cruising - Are you in or out?

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Originally Posted by valhalla360 View Post
If it's open ended and you expect to be gone years, set the real-estate money aside in an investment and buy when you return.
- You may never return to land.
- You may decide to live somewhere else.
- You don't have to pay taxes and maintenance on the house.
- Rental of your primary home is a sketchy. Far different from buying a property purposely to rent out.
Is anyone holding raw land to build on after cruising? That doesn't help with the first two points above but does address the last two. I see deciding to live somewhere else and construction cost inflation as the biggest risks. Taxes should be fairly low where we are looking.
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Old 08-12-2021, 07:06   #14
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Re: Real Estate Stake While Cruising - Are you in or out?

Quote:
Originally Posted by valhalla360 View Post
If the plan is to go cruising for 6-12months, sure, keep the house.

If it's open ended and you expect to be gone years, set the real-estate money aside in an investment and buy when you return.
- You may never return to land.
- You may decide to live somewhere else.
- You don't have to pay taxes and maintenance on the house.
- Rental of your primary home is a sketchy. Far different from buying a property purposely to rent out.
I would add:
- The neighborhood may change
- I worry about the property; damage, etc.

I will worry about investments also. No free lunch.

For us we KNOW we don't ever want to go back. We may never want to go back to land. The Wife is looking at a motor sailer on YachtWorld as I type.
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Old 08-12-2021, 07:18   #15
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Re: Real Estate Stake While Cruising - Are you in or out?

We rented our house out for 5 years to go cruising. Unfortunately we had a poor property manager and we had a lot of work to do when we returned. I would still do the same again as property prices go up and it is a better investment than a boat.
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