One of the topics that comes up from time to time with a couple of riding buds, normally after a few beverages, is that we should go in together and purchase some property somewhere in the Northwoods of Wisconsin or in the UP (where we ride 90% of the time). Since we're all fairly young and work way too much and have family obligations and therefore can't get up North as much as we want, the idea is that this would work out great if it was possible to rent it out quite a bit to help offset the costs. Obviously property rentals are full of risks and partnerships can create issues, but putting that all aside, does anyone have any success in renting out property in the UP or Northern Wisconsin? Ideally, we would like to rent it for nearly all of the summer/warmer months and probably more than half the winter weeks, just using it ourselves for the three or four times we get up there each year. Probably have to get a rental management company involved I'm assuming. Stated another way, it would essentially be a rental property where we could store our sleds that would slowly build up some equity. Seems to me that this would be difficult to pull off without it turning into a money pit, but I'm curious if anyone else has had some success with this.
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Northwoods real estate - success stories with rental property?
- Thread starter Hoosier
- Start date
I'll chime in I have owned a house at Big Powderhorn Ski area since 1991. They have a lodging Assn that pretty much does it all. They keep inspecting during non used time and you can rent during the summer long term (usually people from Florida). They do snowplowing, laundry, housekeeping, minor repairs, arrange for larger repairs like I replaced my roof etc. The winter my place would rent between $325- $425 per night. They take I think 30% and bill you for everything else like housekeeping, laundry on towels and linens, garbage etc. I don't rent except during the winter and I took it off rental this last year. Overall we are very happy to own we can bring our dog up and kids can bring their up as well. We just have a great time lots of options in the winter.
However, things have changed over this period of time. Out of pocket expense has increased from about $2,500- $3,000 per year to last year $8,300. We have no mortgage.
What changed first the lodging assn percentage was about 19% now 30%?, new sewer $372. per quarter, property tax about $1,000, we have electric heat about $1,600 per year, insurance about $900 frame in protection class 9.etc. I should note we use the place and these figures include our use so we don't rent as often in the winter as other places. I should note we keep our place to great condition and its to the point its too nice to rent.
Anyway the last few years the Lodging had to charge back unit owners this was based on rents received to cover the overhead. This last year the charged a flat $700 per unit.
You have the option of not being in the rental pool but still have option of the above amentities including group rates on cable and phone.
During the last 5 years we noticed declining weekend rental income the holidays it gets rented, the first week in January no, MLK to about 60% chance and it was rented rest of jan, all feb and first week or two in March. Now maybe 2 weekends in jan, and feb and one in march (first weekend). Down the street several families own and someone is up every winter weekend. They have a blast. Well that's enough for now.
However, things have changed over this period of time. Out of pocket expense has increased from about $2,500- $3,000 per year to last year $8,300. We have no mortgage.
What changed first the lodging assn percentage was about 19% now 30%?, new sewer $372. per quarter, property tax about $1,000, we have electric heat about $1,600 per year, insurance about $900 frame in protection class 9.etc. I should note we use the place and these figures include our use so we don't rent as often in the winter as other places. I should note we keep our place to great condition and its to the point its too nice to rent.
Anyway the last few years the Lodging had to charge back unit owners this was based on rents received to cover the overhead. This last year the charged a flat $700 per unit.
You have the option of not being in the rental pool but still have option of the above amentities including group rates on cable and phone.
During the last 5 years we noticed declining weekend rental income the holidays it gets rented, the first week in January no, MLK to about 60% chance and it was rented rest of jan, all feb and first week or two in March. Now maybe 2 weekends in jan, and feb and one in march (first weekend). Down the street several families own and someone is up every winter weekend. They have a blast. Well that's enough for now.
It's always great in theory. I think you'd need to be near water for it to be attractive for summer rental, also real estate tax in WI is outrageous (not sure about MI?). I'd advise you to sit down and pencil this out as though it would never be rented, then ask yourselves if you can swing it. The initial costs of owning are always the worst. We have a cabin along the Mississippi River and rent it out to only people we know. We have a retired couple that loves to spend the weekdays there and then we come on the weekends. Also, check out the website vrbo.com, it's stands for vacation rental by owner. I think you'll find a lot of helpful info. When we travel we ALWAYS check this site first. Good luck!
This all sounds like good advice, particularly ezras, LOL. This will probably always be a pie in the sky kind of idea that doesn't get acted on, but it's always fun to talk about. The two guys that I talk about this with now and then are the only two I'd consider going in with.
I think the key for success would be the summer rental.
I think the key for success would be the summer rental.
tealracing16
Member
Talk to people with business knowledge and set it up as an LLC. This way you will have set rules and nobody gets screwed. A couple people I work with have done this and have been very happy with it over the years.
Kind of a reverse thing to think about. I have friends who rent a cabin for the entire winter. No calling around for lodging, leave the sleds there all winter, etc. It's a pretty decent sized place, and about 10 guys go in on it. They did the math and found it's cheaper to do this than pay lodging for 3-4 trips a year each. The bigger the group, the cheaper it is. And probably not a concern that ALL will want to be there at the same time. They've done this the past 3 or 4 years now.
I think NIC is on to something. I'm sure there is a market for this probably someone who uses the place in summer not winter. You can try it out move around and if you don't like it don't return no fuss or muss. I have a friend buying a place in Naples Florida he plans on renting. One of the last issues in Kiplingers Personal Finance (march 2010) has a article with a few horror stories. I hope he won't be one of them. The summer might be a shorter season than winter mid june to mid august due to school.
L
lenny
Guest
I bought a house in Greenland that was a rental house for snowmobilers. Was updates fairly decent. My family and I moved in full time and has been an awesome house for us just to small. I am thinking of selling, has a new garage for sleds, wood burner heats whole house, (High eff propane forced also) you could rent it the times you are not here. heck, I am staying in the area and already have a rental building "old town hall", looking to move into bigger house not far from this one. I could manage it lots cheaper than a company could. I have my old town hall shut down right now, I mean everything, no juice flowing. I think your idea is workable if you could use a local to work with you and get a bit of compensation. kip from pats power sports used to manage the property for rentals before I bought. He had 4 places and cashed out 5 years ago
1blue99srx600
New member
This has also been brought up in my group although I don't have the coin to even dream about it. I would be hesitant, they are my friends (you think ok cool, but someone doesn't have the money to pay their portion or someone is monopolizing the time or not cleaning up or doing their portion of the upkeep), it is kind of along the lines of don't go into business with your friends. I did that part and have know others who have as well and let's just say there aren't any friendships anymore. 2nd to real estate taxes in WI being high. Just my 2cents!
A friend of mine bought a place on a lake in northern wisconsin with another couple from there home town. I told him when he called to say they put in an offer that is was a bad idea and he needed to get a lawyer involved for the paperwork. Ya know, if I die, if we get a divorce, if someone cant pay, that type of thing. They closed in mid october of 2009.
So come christmas time, my buddies wife tells him she has cheated on him with the guy that they bought this house with... I bet that was not written into the contract. In any case, now they are uncomfortable around each other, cant go during the same time and they are working to keep thier marraige together.
It just shows that anything can happen when you go in on a property where there is a lot of money involved. Of course, there are always going to be good situations also but I have vowed to not purchase property with others - ever. I need to keep my wife. She makes way to much money to let her go.
So come christmas time, my buddies wife tells him she has cheated on him with the guy that they bought this house with... I bet that was not written into the contract. In any case, now they are uncomfortable around each other, cant go during the same time and they are working to keep thier marraige together.
It just shows that anything can happen when you go in on a property where there is a lot of money involved. Of course, there are always going to be good situations also but I have vowed to not purchase property with others - ever. I need to keep my wife. She makes way to much money to let her go.
booondocker
New member
A friend of mine bought a place on a lake in northern wisconsin with another couple from there home town. I told him when he called to say they put in an offer that is was a bad idea and he needed to get a lawyer involved for the paperwork. Ya know, if I die, if we get a divorce, if someone cant pay, that type of thing. They closed in mid october of 2009.
So come christmas time, my buddies wife tells him she has cheated on him with the guy that they bought this house with... I bet that was not written into the contract. In any case, now they are uncomfortable around each other, cant go during the same time and they are working to keep thier marraige together.
It just shows that anything can happen when you go in on a property where there is a lot of money involved. Of course, there are always going to be good situations also but I have vowed to not purchase property with others - ever. I need to keep my wife. She makes way to much money to let her go.
Oh, my God... this is too funny!
Sounds like a new series show on CBS, or NBC fall of 2010!!
Seriously....creates a partnership in October and Wife announces she's been playin around with more than the plumbing up at the cabin by xmas!
Okay....all you guys who want to buddy up and buy something....remember to put in the contract, no sleep'n wid dah wife, or deal is off!
HIGHLANDER
Member
what if your the guy whos sleeping with the others wife and shes smoking hot? then is it a good idea?
unless you go up allot I don't think it is worth the hassle.I was in da up 4 times this winter from 4to5days with diff groups of guys at places I go to regularly. I wont stay in shlt holes and payed less than 400 in lodging all winter and had no maintenance no tax bill no major cleaning.and when snow was not so good in 1 area went to another. I know a group of guys that rent out a storage garage for less than 100 a mo at a lady's house and they take the Camry up every other weekend
cuzzinolaf
Well-known member
Sounds like a new series show on CBS, or NBC fall of 2010!!
Yooperville?
Yooperville...hmm maybe that can replace "Cougar Town" when that goes off the air!
Anyway, There are a lot of little details to think about when doing this. Some of the bigger items to consider; Who will watch over your place when you are out of town? Who is someone local that will take care of the lawn and garden work during the Summer/Spring/Fall months. Yes Taxes are certainly higher if it is not your primary residence, but that goes for most states. You will also have insurance, utilities, repair/upgrades....etc
If you own rental property for secondary income around your primary residence that is one thing, but I think it is much to risky buying a second place to use as a "Vacation" home if you will have to rent it out in order to make the payments. Having a place on the water or in a popular tourist location will help your chances, and you could also work with local real estate agencies to see if they work with rentals. For a fee many of these agencies will manage the rental process and make it pretty easy on you.....of course they get paid well for that to!
Stack
Anyway, There are a lot of little details to think about when doing this. Some of the bigger items to consider; Who will watch over your place when you are out of town? Who is someone local that will take care of the lawn and garden work during the Summer/Spring/Fall months. Yes Taxes are certainly higher if it is not your primary residence, but that goes for most states. You will also have insurance, utilities, repair/upgrades....etc
If you own rental property for secondary income around your primary residence that is one thing, but I think it is much to risky buying a second place to use as a "Vacation" home if you will have to rent it out in order to make the payments. Having a place on the water or in a popular tourist location will help your chances, and you could also work with local real estate agencies to see if they work with rentals. For a fee many of these agencies will manage the rental process and make it pretty easy on you.....of course they get paid well for that to!
Stack