Posted by jims on January 21, 1999 at 17:34:51:
I own a duplex on the bay just a block from the ocean in LBI, nj. Over the last two years we broke even on the rents, refi’d and put $30M back in and have seen an appreciation of more than $100M in the property. It is a great place to stay when it is not rented during the 10 week season. If you can break even on the first year, I think you are very lucky. Look closely at those figures to check for “other” expenses. I would pay particular attention to the appreciation in that area, writeoffs, and maintenance factors before buying. Also, is the land leased or do you buy it? Finally, what is the likelihood you will rent the full season i.e. what is your competition offering and are vacancies common. Finally, in an economic downturn second homes are usually the first to suck wind. But they certainly are fun to have.