Life at sea and homeownership

I’m interested in working for MSC but would also like to be a homeowner in the near future. For those that do both, how do you manage a home, car, bills, maintenance, etc. while being away so much?

A decent wife and/or autopay.

7 Likes

As SeaEagle alluded to, either have someone that can handle the bills do it or have autopay set up. The person can be a spouse, parent, sibling or anyone you trust. If checks have to be written get a signature stamp made otherwise set up payments through the bank. Not a big deal really.

Maintenance can be handled in a similar manner, i.e, someone you trust or hire a caretaker.

2 Likes

I suggest that you buy a 4-plex. It’s the largest apartment complex that can be financed like a “single family” home. Keep one apartment for yourself and rent the other three. Hire a property manager to manage the building for you. Don’t try to mange it yourself.

8 Likes

Autopay it is, thanks.

Thank you for the advice.

Thank you.

Definetly need a trusted caretaker around, either family or hired help. Maybe it’s just me, but once I bought a home it changed my perspective on shipping out. Now I’d much rather have a land job and be able to enjoy the place I live to it’s fullest.

2 Likes

I understand your viewpoint but I’m getting to the age where I need to get serious if I’m going to own a home.

For most of our nation’s history, real estate, particularly homeownership, created most of the wealth, but now it’s the stock market. In recent years, real estate has become a poor investment: too illiquid, too many transaction costs, too many new regulations, high carrying costs, excessive real estate taxes, and real estate now rises and falls according to what’s happening in the stock market. I hate to say it, but today, the stock market is a better wealth creator that is incredibly liquid with low transaction and carrying costs.

I heard you give negative opinions of real estate investing before & ask if you have considered the problem with real estate investing & managing might be you? I’ve made it up to 10 properties but scaled back a few. I always made money except for years when I was expanding. It’s been very profitable & I’m happy with it, the same with my real estate mentors that gave me tons of good advice. But again, when friends, family & coworkers discuss with me about the possibility of investing in real estate I’m honest with them about the hard work, brains & risk tolerance required to make money with it. Not everyone will or can make money in the real estate markets. If you don’t think you can, you’re probably right.

Real estate, especially just plots of land with low taxes can be great for diversifying one’s assetts. I wouldn’t mortgage any real estate besides a primary home though.

2 Likes

And remember we are nearing the peak of the market. If i could i would wait a year or so.

1 Like

To counter that peak a bit, a relative is selling his home to buy a larger one. Both his and the home he is buying have appreciated quite well. Zillow estimates both homes to continue at about 8% for now. Once rates start climbing again suspect that rate to slow down. 2,5% mortgage is hard to pass up.

Actually, I have done very well in real estate: land, single family houses, commercial property, apartments, for over 40 years. I own a lot of real estate, most of it is paid for.

2006 to 2012 was horrible for real estate. The stock market recovered in couple of years and set new records, but real estate did not. In many areas, it was 2019 before real estate prices recovered to 2006 levels. Millions of people, millions, lost their ass in real estate.

Read a little Robert Schiller. He’s a Yale professor of real estate, and cofounder of the Case/Schiller housing index. According to him, the average stock market return for the last 150 years is something like 11% (no, I don’t recall the exact number, nor have I updated it). Schiller claims that the average real estate return is more like 8% (I forget the number). Most importantly, Schiller explains the economics that in the long run force real estate and stock market returns to have a reasonably small spread.

Stocks are fast, cheap, and easy to sell for cash at anytime. It can take a long time to sell real estate. Ask anyone that built a spec house in 2006. The transaction costs for buying, improving, and selling real estate have skyrocketed in recent years. So have the carrying costs. It costs nothing to hold a stock. There are no taxes on holding a stock, but real estate taxes are relentless

To me, the thing that undermines real estate the most today, is all the uncertainty. It use to be that you knew what you could do with a property before you bought it, and things did not change very fast. Now, you often cannot know what you can do with a property until you try to get the permits. Many buyers will only buy subject to permit approvals. The engineering for permits is very expensive. Permit conditions often require a lot of extra expenses. Rules change much faster than they use to. Just because you can get permits today, that does not mean you can get them two years from now. In short, today, you are never secure that you can affordable develop your property.

There have been many instances where someone has bought a buildable house lot, only to discover that when they were ready to build 10 years later that they couldn’t get the permits.

I have owned apartments in several states. Being a landlord is fairly easy is some states, but difficult in others. The quality of tenants and being a landlord in a nice affluent college town is a lot easier than being a landlord in a poor post-industrial town. It’s a lot easier to manage 12 single family homes that it is to manage one 12-plex. The problem is tenant quality. Managing tenants is a hassle. Professional managers eat your lunch.

If you happen to be really good at managing tenants, you can do better being a property manager than you can being an owner. A friend of my mine has owned about 50 apartments for many years. He hasn’t bought any new ones. He manages about 300 apartments. He’s done very well.

5 Likes

Tenant quality is crucial. I’ve very been lucky so far, both rarely call me and do most of the minor repairs. Also, #1, they are long term and never late.

1 Like

This is largely true unless you have real estate in places like coastal areas or tech centers. Both of those have their problems, insurance in coastal areas and the boom/bust of tech. Not liquid but if you don’t have a mortgage on the property one can make money, eventually. I played around at being landlord for a bit but the taxes and maintenance cut my profits down to stock return levels. Then I bought land with commercial value in a growing area. I decided to put a coin operated car wash on one lot to help pay the taxes. I was shocked at how much money I made off those coins, way more than needed for taxes. Gave another engineer working opposite me a percent of the business to maintain when I was working. Worked out well. Sold the land to a bank that wanted to build a branch. Invested the money in stocks and bonds for the most part and got out of real estate except for a couple of REITs. Why? Lazy I guess.

2 Likes

As one gets older the time horizon changes. I’m too old for another 10 year market crash.

There are lots of ways to invest in real estate without actually buying any, such as REITs, exchange traded funds, index funds, or stocks of big property owners.

3 Likes

Careful trusting Zillow for anything more than a rough idea. They hate my house, it’s always going down in value despite the rest of the street going up and literally, nothing has changed. Then it will make a big jump and correct so that the price is closer to the rest, then it will trend down again. The Zestimates lately have been way off on actual sales in my area. It’s not consistent enough to make a rule of thumb, some are estimated way low, some are estimated way high. Our market is crazy right now though, average listing to sale is right around 4 days.

I still kick myself for not buying a bunch of houses out in Fernley NV when I first started sailing. Found a whole neighborhood of houses. Nice, 3bed 2 bath, garage houses, no HOA for 40k apiece. Hemmed and hawed a while before I decided to pass. My gut said do it, I just couldn’t see any way that I’d make money out of it. Then Tesla built a Gigafactory just outside of town and you could suddenly tack a zero onto all those house prices…

Oh well.

3 Likes

This is me except I’m not worrying about a crash or a long recovery. I’m just at a stage in my life where I no longer want to put in the time to get maximum returns on real estate investing. I don’t try to discourage people asking for advice about real estate because I know lots of money can be made. But I do tell them about the hard work, brains, patience & luck required. We’re not making any new land & the population keeps growing. Those with idle time & sweat equity available would be wise to put them to use somewhere.

The OP started the thread mentioning homeowners & MSC. I started my maritime career when I was 18 & bought my first home when I was 25. During those 8 years I was either homeless or paid for an apartment. I remembered being pissed off paying rent for an apartment that I didn’t see 2-4 months at a time. At one point I ditched the apartment & put my junk into a storage unit until a girlfriend wanted us to move in together. I never regretted or felt pisssed off about paying the mortgage even though I was in that home less than 30 days a year. IMO, unless a mariner wants to be a vagabond in a different city/country every time they get off, they should have a mortgage so they are paying themselves instead of a landlord.

2 Likes