A very relevant article, on how owners need to find new cost-effective ways to value-add to their properties
(Source: Wall Street Journal)
Vacation homes, once a sign of prosperity, have become financial burdens to many amid the economic slump. With a little creativity, however, it is possible for owners to squeeze extra cash from properties that might otherwise be a drain.
Some people who bought second homes as national real-estate prices peaked during 2006 now have less money to pay the bills and are facing the unenviable choice of selling at a loss—if they can—or waiting out the market. The median price of a vacation home fell 23% in 2008 from 2007, according to the National Association of Realtors, and sales have dropped nearly 31% from 2007.
“Second homes have become an ugly stepchild in an environment [where] people aren’t even buying first homes,” says Cicily Maton, a financial planner for Aequus Wealth Management Resources LLC in Chicago.
Owners who are stuck with those homes can try to make do, at least temporarily, by using their homes to produce extra income and minimize taxes. Some options, such as refinancing to a more favorable loan or delaying improvements, are obvious. Others require more planning.
Read Suzanne Barlyn’s explanation of the different methods in “Second Chances” from the Wall Street Journal (June 8, 2009).