Author Topic: Part-time owner-occupied/part-time VRBO - advice from others with experience?  (Read 1352 times)


  • Handlebar Stache
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My husband and I are considering getting a small property -- either "cottage-type" house or condominium -- in the university town that is three hours from where we currently live.  It is not purely a financial investment.  The town where we are considering buying is the town we hope to eventually retire to -- at least for most months of the year.  It is also within an hour's distance of all of our immediate family and is my husband's "hometown".  As parents age (and move into care facilities) we have fewer options and less convenient options for staying overnight with other family members.  And, we often think we'd like our own space when coming back to take care of their issues.

Also, we are probably about 5-6 years away from FIRE and are quite fond of the new town.  We talk about it a lot and how it would be nice to have a "pad" there to spend more time getting involved, going to university social and athletic events,  and trying to integrate ourselves so we don't enter a state of total shock when we retire.

Whatever we purchase we don't envision being our permanent home in the new town.  We would look at something on the small side that we could afford without too much hardship.  Decent properties can be had in the $125,000-$150,000.  I would like to use the property for mixed uses -- possibly using it personally whenever we want, then renting it out on VRBO or as an "executive rental" for stretches of 3 days to a few weeks.  There are lots of reasons for people to come to town for university events and I think we could make a go of it.  I've already contacted the rental inspector to verify their rules and am in touch with a realtor (high school friend of my husband's) my research has started.  I also have an immediate family member in that same community who is in business (building trades) and would be a good support system for fixing stuff on the property when we're not there.  So I don't feel as if we're flying blind.

Also, I don't feel as if we would have to 100% cash flow the project since we have mixed-motives for doing it in the first place.  But I would like to recoup taxes and interest, if possible, and legitimately recoup some other expenses (and perhaps generate some tax losses) if possible.

I suppose we could also just put money into something. Use the heck out of it and then decide in a few years if we want to sell it at a profit or turn it into a long-term rental.

I'm an accountant and have done lots of reading on the tax implications of property ownership (rental versus personal use) and have a basis feel for that -- although until you're "steeped" in it you feel like you know NOTHING.

But, I'm wondering if others here approaching FIRE have invested in part-time owner-occupied/part-time VRBO property and what your experiences have been like?  Did it cash flow as you thought it would?  Would you do it again?  What type of property did you buy?  How to you manage the property when you're not around?

Any resources or suggestions on the topic would be much appreciated.  Thanks.