Vacation rental as investment property?
I am 32 and (hopefully) on a path to fatFIRE. Work in tech, income has been steady at ~$600-700K for a few years now. My net worth is around $3M, pretty much all of it in the stock market.
The only "problem" is that I have zero debt, and don't own any real estate. With interest rates set to hike and all the <2.5% 30-year mortgages on the edge of disappearing, I think it makes sense for me to utilize this credit line. However I don't plan to stick around in the Bay Area for too long, and so buying a house here as a primary residence doesn't make sense. I am happy renting for the foreseeable future. My options:
- Decide on where to live long term and buy a house there.
- Buy a property (in the Bay Area or elsewhere) and rent it out, maybe with the option of moving into it down the line.
- Buy a property in a "hot" vacation city and rent it out for short stints (think AirBnb or the like) and also occasionally use.
- Do nothing, keep investing in stocks.
Has anyone been in my situation and picked one of these options? I'm particularly intrigued by #3, since it seems to offer a lot of flexibility with low effort (assuming I can find a good management company to take care of things). What are your recommendations for my situation?