Sailing the World: How to Fund Your Adventure with Rental Property Income
Sailing around the world is a dream for many people, but it can be difficult to finance such a life goal. One way to finance a sailing trip around the world is to use income earned from rental properties. In this article, Im going to discuss the steps you can take to use rental income to fund your sailing adventure and the considerations you will need to make along the way. I have personally sailed solo thousands of nautical miles and been at sea for months at a time. It's estimated that over 2,000 people any given day are cruising around the world full time on a yacht. So if you love the adventure of sailing and love talking with other sailers keep on going!
Step 1: Purchase rental properties
The first step in using rental income to fund your sailing trip is to purchase one or more rental properties. The properties you choose will depend on your budget, location, and goals. You may choose to purchase a single-family home in a suburban area, a duplex in a city, or an apartment building in a tourist destination.
When purchasing rental properties, it is important to consider the potential for rental income, as well as the potential for appreciation in value. In 95% of all real estate fortunes it's made on the purchase so make sure your plan and numbers when you purchase are correct and have good margin if you're not. You will also want to consider the costs of maintaining and managing the properties, as well as the local rental market and the demand for rental properties in the area. Using a real estate agent that is extremely knowledgeable with cash flowing properties is pivotal. To fund a long term sailing trip (5 years or more) you need a property that performs with net cash leftover every single month. For a shorter sailing trip you can get away with purchasing in a trending market and aiming for market appreciation as a source of income (refinancing the equity or selling) but as fancy as the terms are at its core its still basically gambling. Just make sure there still is a safety margin in your plan so you don't face a huge setback.
Step 2: Establish a rental income stream
Once you have purchased one or more rental properties, you will need to establish a reliable rental income stream that does not damage the property in the process. This will involve finding and vetting tenants, setting rental rates, and managing the day-to-day operations of the properties.
You can do this yourself! Yes, even from the middle of the ocean, I have done it! Or hire a property management company to handle the task for you. It is important to have a system in place for collecting rent, handling repairs and maintenance, and addressing any issues that arise with tenants. Do not over romantisize this process. Some tenants can and will destroy the property and go months without paying you if you let them. Do not go off of your "gut feelings" alone when selecting and approving tenants. Also do not let your property manager alone select your new tenants or solely take their word when pricing the rent you should charge, do your independent market research. Unless you have a thousand properties most leases are 1 year or more and you can easily check the application prior to leasing and this helps hold your property manager accountable. Do not assume your property manager will do this. They are human and in a business that only profits from high volume increases in units managed and the scaling problem for quality in property management is a nightmare. Do your part and help screen the tenants. There are plenty of books on how to accurately account for risk level when selecting a tenant.
Step 3: Save and invest rental income
As you begin to collect rental income, you will need to save and invest it in order to fund your sailing trip. It is going to be small at first, you will feel like you're doing a lot of effort for a few hundred extra bucks a month. This is totally normal, cash flow is a process and gains exponentially over time but you need to do it right. Sorry, probably should have told you this before but 99% of normal real estate investors don't get rich overnight. If your wanting to take a quick sailing trip (6 months or less) and have a spouse thats rugged enough you can get away with buying a older used monohull and literally bounce through the islands having tons of fun, diving, surfing, fishing and meeting island people for 6 months on 30k purchasing the boat and 15k living expenses if you stay at anchor most of the time and dingy in to the shore. Just keep tabs on eating out because in the islands they can drain you fast. The good part is monohull sailboats can carry lots of weight. It's not uncommon to carry 6 months or provisions including enough beer and wine to run a college football championship. Sailing is a friendly culture and most islands have only a handful of peaceful anchorages so sailers generally are next to each other. You will find yourself inviting and being invited to have dinner with other cruisers on boats. You will share stories and might even decide to travel along side each other for a while. But let's stay focused here, you want the flexibility to spend long periods of time exploring the world and yourself and this is going to take steady funds over time. A good way to do this is the BRRR strategy which stands for Buy, renovate the property, rent it out, refinance it take the cash out and repeat. This a good way to increase your portfolio rapidly while your regular salary stays the same or increases overtime. Once you build up the amount of properties you have, you transition from the building up phase to the optimization phase this is the part where you no longer are using the income from the properties to grow but to maximize cashflow. This usually includes selling a few of the properties taking the cash and paying off as many of the other properties as you can. This is because you are after maximizing cashflow now and illuminating the mortgage payment means you now keep all that cash each month from the tenant that you were sending back to the bank. Sounds easy but it's not, you will must avoid the trap of buying the wrong properties. It's easy to hope a deal works, stop doing that, it must work the day it closes or you do not do the deal. If your real estate agent is more good looking than their brains and you struggle with patience and self control you will be in trouble. Decide today to live the adventure on the sea and in your personal life and not when selecting real estate agents and properties. They must perform with solid evidence and facts. It's a business and according to Tony Robbins 96% of businesses fail in the first 10 years so take this one serious and you will find yourself sleeping well at the marina in the islands.
Step 4: Plan and prepare for your sailing trip
As you continue to collect and save rental income, you will need to plan and prepare for your sailing trip. This will involve researching and choosing a sailing route, purchasing and outfitting a sailboat, and getting the necessary training and certifications to sail around the world.
You will also need to consider the cost of living on the boat, as well as the cost of any necessary repairs or maintenance during the trip. Im not going to go deep into this one as there are dozens of well written books on the subject. I will say that if you get a good boat you will be surprised at how little you will spend when you're at sea. There is nothing to buy at sea of course and when you get to your destination a lot of times it's a remote place with limited stores and indigenous people. most of the people you meet while sailing are on a different pace of life. They don't call it on "island time" for nothing. It's a slower pace of life filled with a heavier focus on conversation, appreciation of nature, novel ways of fixing things and activities. In most islands this generally results in consuming far less material goods than life in the populated urban cities of the world. Its not really planned most of the time, it just kinda happens.
Step 5: Set sail and enjoy the journey
Once you have enough rental income to hit your target and have properly planned and prepared for your sailing trip, you can set sail and enjoy the journey. Remember to be flexible and open-minded, as things may not always go as planned. This includes the planet doing its thing. Yes, that whole man verses wild thing. It's totally real. Nature does not follow your google calendar and you must prepare mentally now for that. Uncertainty is a vital piece to adventure and nature works very hard to provide that need. At one point thousands of miles from America I remember making a list of everything on board I had bought from china because the $hit just kept breaking and I needed to plan accordingly for that. The ocean is in constant movement which means every nut, bolt and electronic is moving all the time. Add pounding waves and heavy winds and things get tested. Your mental prepared ness to handle these events with slow controlled movements and keeping a "Gentleman's passage south" is critical to you and your crew having an enjoyable adventure. In other words weather happens, it's how we adjust to it that makes the difference.
Be sure to have a plan in place for handling emergencies and to always keep safety as your top priority. This will help provide the other human need, the need for certainty. Remember, you're not getting any younger so planning for a boat that will match your physical needs, is extremely important. Unless you hire crew, making the assumption you will "just have people that always want to travel with you" usually is not a winning plan. I personally have met hundreds of full time cruisers and 99% of them are just two people. So plan accordingly and buy the right boat and you will be glad you did.
A few final points I will note here, the temptation as a sailer is to purchase rental property all along vacation destinations. While that sounds fun the reality is don't ignore the economic basics. The town must meet the criteria for diverse income, stable metrics overtime and a growing population for best results. This may mean you find yourself purchasing in a traditional linear low cap market like Oklahoma. You want your investments to be relatively boring so they are stable and predictable leaving your need to fulfill uncertainty to the oceans.
Using rental income to fund a sailing trip around the world is a viable option for those who are willing to put in the work and make the necessary sacrifices. With the right planning, preparation, and mindset, you can turn your dream of sailing around the world into a reality.
It's important to note that the outcome of owning rental properties are not guaranteed and it is important to consult with a financial advisor and conduct thorough research before making any decisions. Additionally, owning rental properties is a long-term commitment and one should not rely on solely on rental income to finance a goal like a sailing trip. Have other investments and cash reserves. If you like the idea of investing in Oklahoma give me a call, I have been a broker now in oklahoma for 7 years and helped hundreds of homeowners grow their wealth.