Grandma’s house essentially is a transfer of wealth. In some situations, keeping grandma’s house is not practical, while in others it may be just what the family and community needs.
By Sunny Jones
There’s a quote all over social media saying. “Don’t Sell Grandmas House.” What is the intended message behind this?
It’s no secret that the wealth gap is at an all time disparity. The truth is that collectively Black wealth is on life support. In fact, research shows that wealth of Black families is headed towards a zero in the next 30 years. Did you hear that? ZERO.
So what should you do when it comes time to make such an important decision that not only affects you, but those who may come after you? Every decision is unique because of all of the different family dynamics, equity and financial positions.
Two questions to ask yourself when considering what to do with grandma’s house:
The first question is, how will your decision impact the next generation of your family? If you plan to sell grandma’s house and blow through all the money on clothes, cars, living it up, you might want to rethink your options. If your plan is to pay off debt and invest that money in other income generating vehicles that work for your lifestyle, selling may be the best option. Let’s say for example you will buy an apartment building to build a larger portfolio and larger returns. This can be a smart strategy to accelerate the wealth building process for your family.
The second question is, can you afford to keep the property? If you keep the property, what does that look like? Renting out the property and covering the expenses of the property while generating income can be an additional stream of revenue to save and invest while still keeping the property that may have sentimental value.
Every family or individual faced with this decision has a tough decision on their hands. Grandma’s house essentially is a transfer of wealth (if she didn’t pull all of the equity out). In some situations, keeping grandma’s house is not practical, while in others it may be just what the family and community needs.
These conversations need to include grandma while she’s here as well so her wishes are considered and a plan can be formulated that makes sense for all parties involved. No one enjoys having these conversations, but it’s better to have a clear plan that can positively impact generations to come, than to make hasty decisions when you’re distraught and emotional.
Real estate is a driver of wealth. Successfully navigating the waters can put families at an advantage that will give each generation to come a head start.