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West Lafayette IN | My wife’s grandparents owned a condo in Siesta Key in the 1970’s & 80’s. She grew up going there as a kid. We wanted to diversify from just corn and soybeans so we started looking into vacation rentals. My wife loves vacationing, talking about vacations, booking vacations etc. It’s a perfect fit for her. During Covid, the Fed Funds Rate dropped to near zero. Therefore, you could get a 30 year fixed rate mortgage at less than 3%. We exercised a cash out refinance to harvested equity in farms that we owned and bought condos with 100% debt. With a 30 year fixed, 3% mortgage the condos will cash flow even with 100% debt. This never happens with farmland and it was probably a once in a lifetime opportunity for condos. Depreciation eliminates most of the taxable income from the condos. Since the mortgage is against the farm, the interest expense decreases the farms tax burden. The prices of condos quickly skyrocketed and now the same loan is probably 8%. I could talk for hours about it, but that is the “short version”. | |
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Destin,Fla
