Posted by Ronald * Starr(in No CA) on March 10, 2003 at 23:40:37:
Brent–(AR)------------
Good for your dad, he is doing the smart thing. Good for you getting the books, you are doing the smart thing. In my opinion, anyway.
As for your last question: “Would he be better to loan me/others the money, earn a good interest rate and just take the tax hits, but make more money?” Well, when we talk about the return from rental real estate, we think of CAT: C=cash flow, A=appreciation, and T=tax benefits.
In your initial post you talked only about T. I responded that your father could probably not get T from rental properties. If you analyse rental properties you have to add up all three economic benefits of owning them. Depending upon the income, expenses, and appreciation he might get a pretty good return on his money. I don’t know what it would be where you are. So, just because he does not get T does not mean he should forego rentals, as he still gets C and A.
Whether he would get a better return renting the money out–loaning it–is a matter of calculations.
There are a lot of people who prefer not to own real estate, but rather to loan money secured by real estate. This is discussed on the Cash Flow Forum here on the CREONLINE.COM website. This might be a good investment for him.
Good InvestingRon Starr***