Man! I wish I had your crystal ball. - Posted by Bill Gatten
Posted by Bill Gatten on January 11, 2001 at 19:45:38:
Hey! Who said there is a recession headed our way? There are no valid reports of such a thing expected to happen (much less imminent). And even if there were to be a recession, if your relative is planning to be there for while, he or she will be far better off in the long run by ‘owning’ versus continuing to dump rent payments and tax benefits down someone else’s gopher hole.
Exactly 40 years ago my father-in-law had the same responsibility (in his mind) that you feel you do. I was given (for free) a $60,000 triplex, fully rented out with a positive cash-flow (a builder I worked for as a clerk at the time needed to get a take out loan and merely needed someone to go on title to get his money freed up). My father-in-law then informed me with the best of intentions (in 1961) that acquiring real estate at such a time was foolish (even free real estate): I would only be saddled with negatives and management burdens in the upcoming recession…so I listened and waited 25 years to buy my first income property.
That old building and the property it?s on recently sold for $1,500,000.00.
Almost invariably, the benefits of owning versus renting far more than outweigh the potential risk that some prognosticators might (MIGHT possibly, maybe, perhaps) be right in heralding.
For whatever it’s worth, I’d suggest encouraging these folks (your relatives) in what they’re doing and congratulating them on their accomplishment: they are now a part of the American Dream and have their piece of the pie (that, in itself, is worth a bundle).
The ony negative I see is that they’re not doing it for nothing down and no bank qualifying (the way we do do it).