A Jersey Shore Example from 1986

This is an excerpt from an MSN article. The article is mostly about how not to lose money investing in real estate, but offers a specific example that includes a disparaging description of the Jersey Shore. His example seems pretty dated since the days of infected needles on the beach was almost 20 years ago.

Snip...

"The tenant leaves

You can also get hurt on real-estate investments in good neighborhoods. Another client built a new rental property on the Jersey shore. He looked forward to full summer rentals that would cover his expenses for the rest of the year.

Unfortunately, in his first rental year, drug needles were found washing up on New Jersey beaches and stories of HIV infections from contaminated needles were grabbing headlines. A tenant my client thought he had signed up for two months disappeared, and it was too late in the season to find a replacement.

Financially, my client got clobbered. Without the summer cash flow, he couldn’t meet the mortgage payments. He sold out for more than the property had cost him, but he had to pay transfer costs. So, on a cash-flow basis, he was substantially out of pocket.

The good news was that this client didn’t have to pay any taxes. The bad news is why: He'd lost his shirt."

Full article..