Analysis Paralysis on Personal Use + STR Vacation Home

[Dina Schmid]

First I do want to say that I really appreciate everyone sharing their experiences and the wealth of knowledge I have found here. Of course, it's just added to my analysis paralysis! 

How did you get over that and pull the trigger - or know that it's best to walk away? Is there any advice you'd give me on our particular situation:

Husband and I are 50-something "millionaire next door" types with no debts and significant savings. As my husband gets closer to retirement, his dream of owning a cabin in the woods gets stronger. We've enjoyed checking out different areas within ~2.5 hours from our home on the outskirts of Cincinnati and recently saw something near the Red River Gorge that I really like and can see myself going to frequently. It is priced a bit higher than what I wanted but would really lend itself to a more upscale couples retreat with some improvements. While I would rent it out as much as possible, husband would want us to block out 2-5 days/month there. 

We're both struggling with crunching the numbers. We would need to hire a management company (found one we like, they take 30% but allow owners up to 60 days/year occupancy). In addition to furnishings, t will need work (such as new countertops) to meet my vision for upscale couples retreat. We go back and forth on how much we would put down and how much to set aside to get it up and running as a STR as quickly as possible. That leads to going back and forth on whether it's worth it given the upfront investment and the data we're finding on occupancy rates, cash flow, etc. vary from losing $5K/year to making over $10K/year. Very frustrating.

(Also assuming we wouldn't do an LLC to purchase since it wouldn't fully be a business. I own my own business/LLC and am open to changing that structure for tax purposes, such as putting it under an S- or C-Corp if it would help with this situation.)

I appreciate any and all thoughts on this matter as I can't seem to get out of my own head on this!

[JD Martin]

Quote from @Dina Schmid:

First I do want to say that I really appreciate everyone sharing their experiences and the wealth of knowledge I have found here. Of course, it's just added to my analysis paralysis! 

How did you get over that and pull the trigger - or know that it's best to walk away? Is there any advice you'd give me on our particular situation:

Husband and I are 50-something "millionaire next door" types with no debts and significant savings. As my husband gets closer to retirement, his dream of owning a cabin in the woods gets stronger. We've enjoyed checking out different areas within ~2.5 hours from our home on the outskirts of Cincinnati and recently saw something near the Red River Gorge that I really like and can see myself going to frequently. It is priced a bit higher than what I wanted but would really lend itself to a more upscale couples retreat with some improvements. While I would rent it out as much as possible, husband would want us to block out 2-5 days/month there. 

We're both struggling with crunching the numbers. We would need to hire a management company (found one we like, they take 30% but allow owners up to 60 days/year occupancy). In addition to furnishings, t will need work (such as new countertops) to meet my vision for upscale couples retreat. We go back and forth on how much we would put down and how much to set aside to get it up and running as a STR as quickly as possible. That leads to going back and forth on whether it's worth it given the upfront investment and the data we're finding on occupancy rates, cash flow, etc. vary from losing $5K/year to making over $10K/year. Very frustrating.

(Also assuming we wouldn't do an LLC to purchase since it wouldn't fully be a business. I own my own business/LLC and am open to changing that structure for tax purposes, such as putting it under an S- or C-Corp if it would help with this situation.)

I appreciate any and all thoughts on this matter as I can't seem to get out of my own head on this!

 Not everything you do in life makes money. You make money to live, not live to make money (or at least I think a good life works out that way). You shouldn't be afraid or ashamed to pull the trigger on a splurge or a luxury if you've done everything else right in your life. If you've really become "millionaires next door", I don't particularly see how "losing" $5-10k per year is anything to even lose sleep over. I know people who spend that kind of money and more just playing golf in a year. You end up with a (theoretically) appreciating asset.

I own a STR in Florida that hasn't broken even yet and may not ever. I don't care. I worked my *** off my entire life to be able to enjoy myself when time became a lot more valuable than money. I spent a lot of years driving junkers, mucking around in crawl spaces fooling with sewer pipes, and using my week or two's vacation from my "day" job to get rental properties rehabbed. Now it's time to reap the benefits.