What do we do with our cash now?

[Mitchell R.]

With rents going up and property values too high, what are people doing with cash? For my investment style I see better value in winter on beach vacation rentals, but I worry about not deferring my taxes. I have long term rentals and vacation rentals. I am trying to figure out what to do with the cash. I see value in building, but not earning money on money for a year is disappointing. I thought of out of state investing, but I have a legitimate trust problem with property managers. The beach rentals do not seem to be at a discount when I calculate depreciation and other losses. Long term rentals are too high and I cannot receive the rents needed to cover cost. I wish I bought more property the last ten years. Inflation looks to be real and increasing. It is difficult because I went through the Great Recession and am naturally a pessimist. I never speculate and only let the “actual” numbers be my guiding light. So in this environment, do we sit on cash and wait or buy high? Or are there any other thoughts?

[Alecia Loveless]

@Mitchell R. I think if your numbers aren’t working you could try looking elsewhere. I’ve bought in my area this year and my numbers are working.

However I’m shifting plans and am about to switch to a different market in order to try to scale my portfolio as the largest property I can buy where I’m located is a 4 unit and I’m ready to go bigger now.

I think the key is to figure out your plan and stick to it. If you want to invest in beach property but Florida is too expensive maybe the Gulf Shores of Alabama would be a better fit monetarily and you’d find you could be just as comfortable there.

Maybe if you just step back a little bit and brainstorm (you and any other decision makers in this process) about what other alternative options might fit into your investing plans you might find a solution.