WSJ had an excellent article this morning on the perils of buying a vacation home. Ironically, the “Financial Samurai” provided outstanding advice.
For Every Vacation-Home Fantasy, There Is a Harsh Financial Reality
Sam Dogen, creator of the Financial Samurai website and author of “Buy This, Not That,” said people need to understand that their property may not appreciate as much as they expect, especially in the current market, where some experts expect prices to slide.
Mr. Dogen bought a two-bedroom condo in Lake Tahoe for about $715,000 in 2007. The asking price was $810,000, so he thought he was getting a deal. However, the property ended up plummeting in value by about 40% over the next several years due to the financial crisis.
Today, the property is still worth less than what he purchased it for, he said.
“It was a poor investment,” he said.