The difficult transition from real estate to liveaboard

[2savage]

When we are done with Europe

This could take a while. Europe isn't a country, it's actually made up of quite a few:

Albania
Andorra
Armenia
Austria
Azerbaijan
Belarus
Belgium
Bosnia and Herzegovina
Bulgaria
Croatia
Cyprus
Czechia
Denmark
Estonia
Finland
France
Georgia
Germany
Greece
Hungary
Iceland
Ireland
Italy
Kazakhstan
Kosovo
Latvia
Liechtenstein
Lithuania
Luxembourg
Malta
Moldova
Monaco
Montenegro
Netherlands
North Macedonia
Norway
Poland
Portugal
Romania
Russia
San Marino
Serbia
Slovakia
Slovenia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom (UK)
Vatican City (Holy See)

How long before you are 'done' with it?

 

[AlanT]

This could take a while. Europe isn't a country, it's actually made up of quite a few:

Albania
Andorra
Armenia
Austria
Azerbaijan
Belarus
Belgium
Bosnia and Herzegovina
Bulgaria
Croatia
Cyprus
Czechia
Denmark
Estonia
Finland
France
Georgia
Germany
Greece
Hungary
Iceland
Ireland
Italy
Kazakhstan
Kosovo
Latvia
Liechtenstein
Lithuania
Luxembourg
Malta
Moldova
Monaco
Montenegro
Netherlands
North Macedonia
Norway
Poland
Portugal
Romania
Russia
San Marino
Serbia
Slovakia
Slovenia
Spain
Sweden
Switzerland
Turkey
Ukraine
United Kingdom (UK)
Vatican City (Holy See)

How long before you are 'done' with it?

I read this and Laughed. We spent 4 years in Europe (Med) and only just touched the surface. We will be back, likely dirt-based next time.

I have briefly read all the posts on this topic and the ground (or water) is indeed well covered with a number of knowledgeable posts from active cruisers.

I have only one small point to add. When we returned to land after 4 years of 24/7 living on board I would wake up in the night quite frequently. After a while this settled down. I began to realize that there was nothing to check, nothing to be wary of (anchor dragging, wind picking up, bilge pump running etc). Then I realized that I was more relaxed in my dirt home in the evening and I attributed this to the lack of those stresses.

Don't get me wrong, I didn't notice or categorize them as stressors while I was living the life aquatic, but back on land I noticed a difference and for a while (3 years) I really enjoyed that difference. Then (and now) I started to miss living aboard.

Just my idle thoughts.

~A

 

[catalinajack]

This could take a while. Europe isn't a country, it's actually made up of quite a few:



Albania

Andorra

Armenia

Austria

Azerbaijan

Belarus

Belgium

Bosnia and Herzegovina

Bulgaria

Croatia

Cyprus

Czechia

Denmark

Estonia

Finland

France

Georgia

Germany

Greece

Hungary

Iceland

Ireland

Italy

Kazakhstan

Kosovo

Latvia

Liechtenstein

Lithuania

Luxembourg

Malta

Moldova

Monaco

Montenegro

Netherlands

North Macedonia

Norway

Poland

Portugal

Romania

Russia

San Marino

Serbia

Slovakia

Slovenia

Spain

Sweden

Switzerland

Turkey

Ukraine

United Kingdom (UK)

Vatican City (Holy See)



How long before you are 'done' with it?

Uh, 2savage, thanks so much for the geography lesson. I am aware. How I define "done" is up to me, not you. How condescending of you. I can't believe you actually took the time to write your comment. You must be really bored with your life.

 

[Hippocampus]

Found the hardest part of full time cruising were:
Mail- no way to fully deal with this when out of the country. Simple things like when a handwritten notarized signature is required and a electronic signature isn’t accepted. Needed to close on selling commercial property. Ended up having to sail to a US possession to find a notary the US town would accept to register the sale. St. Brendans is fine but for this and that ended up having some mail remailed to family to take care of. Was lucky as was able to give one of my daughters power of attorney and deal with most of the issues I couldn’t deal with remotely.
Family. No way around it being physically present is a whole different thing than facetime. Particularly true with young kids and the elderly. In both cases you make multiple observations you wouldn’t with remote contact. For kids facetime is emotionally meaningless if you don’t physically see them periodically.
Keeping land based relationships active. Your world, concerns and outlook are entirely different than dirt dwellers. For my close friends the relationship remained strong but there was no commonality of life experience with other dirt dwellers and those relationships withered. Yes, you rapidly get a new circle of cruising friends but cruising is a different phase of life.
Loneliness. Sounds bizarre but sometimes weeks or even months go by where it’s just you and the bride. Everyone else is “other”. For us this was a particular issue where the primary language was French or Spanish. It’s politically incorrect to say but also where we were the only caucasians the locals were often stand-offish and it took effort to interact person to person getting them to accept you as just another person.
Security. You know the good and bad spots around your house. Like “bonfires of the vanities” even with noonsite you don’t when cruising. The need to learn that anyway you can rapidly after landfall is another chore.
Where’s/who’s good or not so much. This includes laundries, food shops,shops,marine vendors and techs. At each spot it’s a whole new puzzle to solve.

As an aside there’s no good beef just about anywhere in the Caribbean basin or islands. You can get decent tubes of ground beef in the French islands but that’s about it. Lamb, duck, chicken and even goat is fine but beefsteak isn’t worth buying. Also coming from New England seafood is disappointing unless you catch it yourself. Cruising you’ll likely miss some of the regional foods from home. However, fruit was amazing.

 

[2savage]

Uh, 2savage, thanks so much for the geography lesson. I am aware. How I define "done" is up to me, not you. How condescending of you. I can't believe you actually took the time to write your comment. You must be really bored with your life.

Hmmm. My cheek is beginning to hurt with the pressure from my tongue. Sorry you took this the wrong way. No condescension intended. As for a geography lesson, there's probably quite a few in the list that I couldn't stick a pin in on a map. Moldova? No clue about that one.

 

[LUVN LIFE]

AlanT, that is what we experienced when we sold LUVNLIFE after 13 years living aboard. She was in Bristol condition and we did not realize how much energy or take much thought in how much upkeep it took to keep her like that. We were just so enamored with the lifestyle. When we moved back on dirt here in the Mountains of Western North Carolina, cutting trees and clearing brush around our log home is a piece of cake relative to proper boat maintenance. Having said that we tell everyone that we would not change that time on our boat for anything.

 

[catalinajack]

Hmmm. My cheek is beginning to hurt with the pressure from my tongue. Sorry you took this the wrong way. No condescension intended. As for a geography lesson, there's probably quite a few in the list that I couldn't stick a pin in on a map. Moldova? No clue about that one.

No problem.

 

[Chris Leigh-Jones]

This has been an interesting thread to read with lots of real world experience. To add our own two cents this is how my wife and I tackled the conundrum.

Our long term plans seem to change with the years but there has been a consistent thread, to retain the freedom of choice. I'm an ex seagoing engineer and in retirement wanted to return to the sea. So the plan was to use an existing career in residential construction to build our own and additional properties that serve also as short term rentals in a popular US based east coast location. The income from these covers most run, maintenance, Tax, HOA and finance costs of the properties from pre IRS tax monies. The remainder supports our living expenses. Within the inequities of the US tax system, we are able to offset much of our own living expenses as justifiable in freeing the properties to become available for rent plus everyday operating expenses such as vehicles.

In our time we have shared the economics of such a strategy including its accessibility to the average Joe (its not that hard). Its really no harder than most long term retirement planning by more traditional means. We get the boating world we seek and the properties both support that and provide the inflationary hedge needed to preserve our future options. I know there are many ways to kill a cat, this is ours now take on the age old problem. Regards, Chris

 

[Hippocampus]

When working full time was involved in property development and rentals as part of a LLC with other docs. But when we went cruising wanted nothing to do with any land based economic activity I would need to be actively involved in without me being in control of when the involvement was required. This is especially true for rentals either short or long term. Even with paying for management (which significantly cuts down profit) it’s a ball and chain. At a minimum you need to be contactable. It’s not passive income like a investment portfolio or even a REIT. It’s also not without risk. In my state it’s extremely difficult (and expensive) to evict someone who knows how to game the system. Yes real estate is a good way to get rich but takes time,effort, smarts and some degree of luck. When we threw up the anchor didn’t want to worry about anything but the boat. Wanted to be off grid and uncontactable for weeks if we so choosed. Sure we had Satphone email,SSB and Pacnor so were always available to a select few. But not having any business concerns at all meant freedom and much less stress. Have had friends get upside down from various things from their rentals- named storm damage, fighting losing properties due to imminent domain, being unrentable due to a murder then needing rehab from that and damage as the place was taken apart by LEO looking for illegal money and drugs, various suits and torts etc. While cruising wanted no debt, no “nut” to cover, and a low risk income stream.
Right now rentals are great both long and short term both high and low end. When the recession hits suspect short term vacation rentals, commercial will suffer and you (or your manager) will be chasing getting the rent, or evicting or you will be carrying empty space. Rather call my advisors if and when I want.

 

[Chris Leigh-Jones]

Dear Hippocampus - you are, as has been the case in the past, absolutely correct in your observations. We have had student rentals in the past and built "Section 8" housing (that I refuse to own on a rental basis) and workforce housing, unsubsidized. In this process we have experienced many of the issues you have mentioned.

Our defense here is we are also the owners of the management company but have created this entity on a hands off basis a.k.a Staff manage the day to day. This need not be the exact model as there are good management companies out there (and a few less so) and generally their fee is worth paying as opposed to short term renters acting alone. Managing average daily rates and occupation, target marketing plus endless renter issues is not worth the phyrric victory of an additional $$ margin. Its not passive income but we have found the risk has been worth the effort long term in comparison to other more risk free options that exist.

I can only report on what has worked for us, with a careful selection of rental market and product and building ourselves to create equity from day 1. Probably the most advantageous angle of this approach is the inflationary hedge. As long as the asset metaphorically washes its face (income>expense) then the investment is protected against the ravages of inflation and we retain a plan B should plan A no longer be viable. We have also experienced a bunch of named storms, painful short term, but planned for and, so far at least, nothing catastrophic and not covered by business interruption insurance (also keep off beachfront properties).

This really is a shades of grey scenario and I would not deign to recommend one solution over another but can report on what worked for us. I noticed reading through the general thread that the choice was generally viewed as binary, either one or the other but not both. My reply was to illustrate a third way that would also be easy enough for others to mirror given some planning and a modicum of luck or aptitude. Regards, Chris

 

[bowball]

Everyone seems to think real estate is a guaranteed inflation hedge. My concern is that with rising interest rates, ultimately house prices have to adjust for that downward as affordability has decreased, at least from this point.

 

[bowball]

Uh, 2savage, thanks so much for the geography lesson. I am aware. How I define "done" is up to me, not you. How condescending of you. I can't believe you actually took the time to write your comment. You must be really bored with your life.

For another perspective, this seems like an inappropriate harsh reaction to something that was said, as I read it, in fun and jest.

 

[bowball]

With respect, your assumptions are inaccurate at best. We are selling our boat and building a dirt house. In this market we will ilkely come close to recouping our original purchase price including lots of improvments. That aside, even if we only got what we paid paid for it, EASILY done, the proceeds will be cash-in-hand. Please explain how that amonts to DIMINISHED financial resources. What you asserted makes no sense.

Historically on average he’s been right, though perhaps not in your situation.

However, I believe the accurate way to look at this is not whether you made or lost money but the relative difference in the appreciation/depreciation between the boat you bought from when you bought it and the value of the real estate you would have bought then compared to what it costs today. If the house went up 2x yet you broke even on your boat, then you do have diminished financial capacity to buy it today. My guess is you would have done better over that time period financially owning real estate rather than your boat.

However, as we all know, we don’t go in to boating for financial gain!

 

[bowball]

This is an interesting thought, and a good post!


The big lesson to learn from this thread is to if possible, have an exit plan from liveaboard live so that you are not trapped by the decisions you make for the rest of your life.

Great takeaway Kevin and I agree!

How’s Mexico? I’m jealous.

 

[Hippocampus]

In real estate as in so many things the way to mitigate risk is to diversify. CLJ is very smart and did just that being in multiple forms and sectors. Also being in multiple units allows the ability to absorb non performing asset units as long as the majority continue to be in the black. Unfortunately that opportunity isn’t available for many. It takes significant initial resources or much time and labor to have sufficient diversity. It takes years to wisely develop or purchase such a real estate portfolio even if resources are available. That’s why some join others to have sufficient funds to permit such diversification while others use REITs or other instruments. It’s a basic issue with any income stream and an obstacle between having your money work for you versus working for your money. The more money you have working for you the better you can hedge against adverse events and conditions and the less risk you are subjected to. We have simultaneously owned multiple REITs. Some performed poorly and some well. Overall made money. The most money we made was when we built our office. Gathered 30 doctors and built a building in an industrial park. Soft costs were large so included undeveloped land which we didn’t need. When I sold my office condo also sold my undeveloped land. Return on investment was ~40 fold. It took decades from initial investment to payoff.
Believe this thread is about the transition from land to sea. Those suggesting real estate make a very cogent case. I only wished to stress two points. If that is to be part of your strategy then you increase your odds of success if your involvement predates the transition by quite some time. Usually on the order of decades. If you want nothing interfering with your cruising life you should entertain arriving at a near total passive ownership position. To the extent your positions in any asset class if they are diversified risk is mitigated.
Knowing many long term cruisers it seems those no longer dependent on breaks of consulting or intermittent but continuing need to manage assets were lower stressed. Often not possible but those who had secure, passive income streams were lower stressed. It’s a trade off. Active involvement means more income. Passive may mean a smaller boat and more DIY. Yes us in the middle have the hardest time with this. We have enough to engage in this activity but not enough to have little concern about outliving our resources or leaving nothing meaningful for our kids or not being concerned we will be boat poor so unable to make full use of the opportunities for enjoyment cruising permits.
Again knowing many cruisers for decades now those in the worst position are those forced to give up the cruising life. Either by sickness, injury or exhaustion of assets. My wife insisted we build a house. We did that simultaneously with building our boat. That means if and when we give up cruising we have a house with no debt to return to and to use when we want a break. We know tragic stories of folks who made no useful plans . You need to think and plan for two transitions. Land to sea. But then sea to land as well. It here several of our friends have used real estate. Building or buying one or more properties with the intention of one or more being their dirt dwelling when they give up cruising.

 

[catalinajack]

Everyone seems to think real estate is a guaranteed inflation hedge. My concern is that with rising interest rates, ultimately house prices have to adjust for that downward as affordability has decreased, at least from this point.

Real estate as an inflation hedge is a longer-term investment that spans the shorter term market changes now at work.

 

[ksanders]

Great takeaway Kevin and I agree!

How’s Mexico? I’m jealous.

I flew back from La Paz a bit over a week ago. Retired life in La Paz is Fantastic! I have a quiet condo overlooking the bay.

Right now I am driving my boat south. Today I am in Bandon Oregon exploring for the day before heading for Crescent City California at first light tomorrow.

My goal is to leave America sometime the first week in August. I have a slip reserved at Hotel Coral in Ensenada where I will wait for Hurricane season to end before making the transit down the Baja.

https://maps.findmespot.com/s/2R02#history/assets

 

[Simi 60]

Been out here over 5 years now

Still haven't managed to get back to do something with the dirt house, car, motorbike or other big project boat.
Bought this boat, moved on and ran away.

Bad us.

Had a mate arrive back in Oz last week after a decade or more in South East Asia.

He's cleaning out the house, organising yard work and trades and getting it liveable for him and him and his wife to move in.

We met him there, introduced him to the neighbours and as suspected, plenty of work to be done but he's on it with labour and rubbish skips turning up during the week

All we really need to do is clean out the wardrobe next weekend
Anything else remaining he can dump or use
Everything else can be done via phone and email, we get to stay out here.
Doesn't get easier than that.

We're happy, he'll be happy, the neighbours will be happy
A win for everybody.