How to avoid vacation home investment blunders

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Be sure to think through and plan carefully before making a move to purchase a second home.

“Won’t the grandkids love this?” Juana quipped. Husband Raj smiled and responded, “They’d better – we spent part of their inheritance on this thing!”

Juana was already envisioning holiday celebrations at their Maui home. The whole family would love this place, and the grandkids could learn to swim, snorkel and so many other things. They would be creating beautiful experiences together. “Maui?” asked daughter Leila. “It’s so far away – and pretty expensive to fly there. What a lovely idea. I’m just not sure it will work out financially for us to go there that much. We’ve been trying to save for the kids’ college. And with their current school schedules and our work schedules, taking a couple of extra days off for travel will be challenging. I’m not sure we will be able to participate much.”“What’s the address, again?” interrupted son, Jim.

“Hold on,” said Juana. “I’m hearing some of you are going to find it hard to make it over for family celebrations, one of you thinks she’s going to live there free while job hunting, and we have just learned that the home we purchased is in a bad neighborhood. I think I have to sit down.”“We have a problem, Juana,” he said. “It appears our financials were not done correctly, and the business is worth a whole lot less. This will also make it less attractive to buyers.

 

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