With interest rates so low, summer rents could actually make your vacation property cash flow positive. This has rarely been the case in the past. My friend who is a mortgage banker told me his bank was offering their lowest rate in bank history on a 5\/1 Jumbo ARM mortgage up to $4MM-2.375%!!! That is far from normal. The bank actually had to raise that rate .5% this week to cool the deal flow because its infrastructure could not handle anymore deals and it is a very service oriented bank. So, let’s do an example.<\/p>\n
There is a property listed for $3.25MM furnished, that one could probably buy for around $3MM. The property has a new house, pool and pool house in a desirable area. It could rent for $20k\/wk. for July and August and $10k\/wk. the last two weeks of June and first two weeks of September. So, the gross rent would be $200k. Subtract the expenses, $2.1MM debt at 2.375% amortized over 30 years (approximately $100k), 15% brokerage commission ($35k), taxes ($10k), maintenance, landscaping, cleaning, trash pick-up ($15k), utilities ($10k), insurance ($10k) and misc. ($10k), $190k total. Net $10k.<\/p>\n
Not saying that this property is the property one would invest in if all that person wants is cash flow, but it is an opportunity to take advantage of the historically low interest rates and the depressed Nantucket real estate market, two phenomenons that are not common, and have a comfort net to know that the property can more than cover itself if need be.<\/p>\n","protected":false},"excerpt":{"rendered":"
With interest rates so low, summer rents could actually make your vacation property cash flow positive. This has rarely been the case in the past.…<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-385","post","type-post","status-publish","format-standard","hentry","category-real-estate-news"],"_links":{"self":[{"href":"https:\/\/www.jpfco.com\/dir\/wp-json\/wp\/v2\/posts\/385","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jpfco.com\/dir\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jpfco.com\/dir\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jpfco.com\/dir\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jpfco.com\/dir\/wp-json\/wp\/v2\/comments?post=385"}],"version-history":[{"count":0,"href":"https:\/\/www.jpfco.com\/dir\/wp-json\/wp\/v2\/posts\/385\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.jpfco.com\/dir\/wp-json\/wp\/v2\/media?parent=385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jpfco.com\/dir\/wp-json\/wp\/v2\/categories?post=385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jpfco.com\/dir\/wp-json\/wp\/v2\/tags?post=385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}