Reply to $7M vs $10M

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Reply to "$7M vs $10M"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]There is no difference between a net worth of $7M vs, a $10M net worth.  Unless you are looking  to buy some big expenditure like a $1.7M Beach house.  Better off to do the beach rental for 2 weeks and let someone else deal with maintenance and upkeep. A diversified portfolio would easily generate about $250k off the $7M.  For most people that would be enough.  You need more cash flow............you are a spender.  Maybe that should be the focus and not the nest egg.  Curb your spending. This is coming from a 63 yo man with a net worth of $4M.  No worries at all.[/quote]

The 2 week beach rental is so true.  We have researched and concluded that a "vacation home" is not worth the purchase unless you plan to actually be there for 4-5 months of the year.  If you plan to rent it out, that means you have to plan your scheduled times a year in advance and if you can do that, you can plan and find a rental just as easily.  When you add maintenance and all costs you likely come out ahead just renting when needed[/quote]

[b]Except that if you keep the second home long enough, there’s a good chance the asset appreciation will cover the carrying costs or even net you a profit.[/b] We’ve had our vacation home 12 years and in that time it has tripled in value. I would have been happy breaking even, but if we sold it right now we’d come out have doubled our investment after expenses. [/quote]

That's recency bias.  I don't think RE has returned more than the stock market over the long-term.[/quote]
+1  And when the airbnb market crashes, many vacation homes won't break even.[/quote]

Apparently that's already happening with several hosts getting out of the BNB business.. switching to long-term rentals or selling.  AirBNBs are no longer the value alternative to hotels at this point so unless you want a big place where multiple families can hang out together, hotels are far more convenient and cheaper/not that much more.  Also more easily cancellable.  [/quote]

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