Vacation Home - upside down on a vacation rental

[Lisbeth]

I have a ski condo in Beaver Creek. I'm $100k upside down. It's killing my cash flow. Mortgage is $3800 and HOA is $900. Do I keep it and ride it out? Try for short sale?

Regretting my "Keep up with the Jone's" mentality. Thanks for any advice.

[SnackDog]

More information would be useful.  What is the value?  $150K or $2 million?  What is the monthly revenue and cash flow?  What bothers you more, the negative net value or monthly net loss?

[Lisbeth]

I purchased it in 2007 for $700k ($550 note) and it's worth $450k. I expect to clear $25k this ski season. Net loss is $30k each year. I'm worried most about keeping up with the payments. I'm torn between holding onto it and honoring my debt. Or taking advantage of a short sale or other program, the $30k goes into my retirement.

[stevewisc]

Run away!!!!!   :)

The HOA fee, taxes? upkeep costs keep adding up.   

The short sale is an interesting dilemma.  They are freely writing it down so it's not ideal but not like bankruptcy where they have really no say in the matter.

Second homes are hard to make work #'s wise in my experience as there is always someone else that is willing to rent it out for less just to get some income on the place.  Soe the market price for rent seldom seems to cover the costs.

Good luck!

[SnackDog]

Colorado real estate is doing better at the moment, but no telling what is next with interest rates expected to rise. Any chance you could rent it out full time rather than vacation rental? If not, might be good to bail out. Get the best realtor in town.