We would more than likely be looking at a vacation spot away from us. Possibly even in another country. We would definitely leave enough money in the bank to back us up, and we're looking to pay mostly cash for the real estate, if we buy (well, cash and possibly a small amount from a refinance, maybe). I don't know if I would want to buy a fixer-upper for the reasons you mentioned though (unreliable contractors, possibly not being able to oversee the work, etc.). Also, I plan to still work and have an income that way, this is just more of a supplementary income. Eventually, if I do well enough (buy a few places), then yeah, I could see myself doing this full-time. I've expressed this actually, to my wife, that, theoretically, this could be a way to retire in 15 years or so (we'd be 40 and 41). Notice, the key word is theoretically. It would take some luck and good fortune and a lot of research. I still don't necessarily agree with those saying that what I'm looking into is speculating, though. Although, I've been talking in generalities. What I'm talking is more like paying cash for a place (like a second, vacation home), and then renting it out. I don't look at this as speculating, as it would be buying a liquid asset (that I could then sell if I wanted) to potential collect money from. If I don't collect money, well, it's not the end of the world, because I just bought a vacation home that I like in a place I like. It's just something I've been thinking about for a couple years, and now is the time to start researching this.
Per the bolded, the reason I asked what kind of annual return you wanted to make on your money was to determine what activities you would have to engage in for it to be possible. Speculating, as you say, is the only way to make 25-30% on your money annually. If you buy a random vacation place, you'd be lucky if your rental income paid for the expenses of the mortgage, taxes and insurance so your income/return would be 0% if not negative(loss). You should ideally find a real estate agent that works with investors. Or, maybe start here for the education you seek: http://www.lifestylesunlimited.com/
I guess the point I was trying to make is that comparing stock market to real estate investment is apples to oranges. All you need is a computer to research and trade stocks. The real estate game requires a lot more effort and extra capital. If it ever gets to the point where you are the "motivated seller," you lose. I don't know much about vacation rentals specifically, but I highly suggest you speak to someone that knows the industry (that is not a broker). I'd imagine investing in a foreign country would open a whole new can of worms. Information may not be readily available online, so I'd be really careful. One more thing... I hope this doesn't sound condescending, but it sounds like you are trying to justify the purchase of a vacation home for vacation purposes as an investment. While I don't know enough about the industry, I would imagine there are better investment vehicles that yield better returns. Maybe I'm ignorant, but even if you can make some money renting out the property, I would still consider it a luxury purchase.
No offense taken at all. I appreciate any advice. Maybe, subconsciously, I am trying to justify buying a vacation home, as I love to travel. I just see people consistently making $800- $1,000 a week renting vacation homes, and it makes me want to be a part of it. I'm in the process of looking for someone locally (I'm not in Houston) in order to help me understand the subjects of this thread, as well.
While it's a very good idea to speaking with someone knowledgeable, I'd be very wary about speaking to brokers. They will probably try to sell you on something, and they won't have much concern about your bottom line. It will be better if you can speak with an investor.
Look into cockroach farming. http://www.latimes.com/world/la-fg-c1-china-cockroach-20131015-dto,0,4704825.htmlstory
