Inflation, lakehomes and extended families..rent vs. buy?

Ask two experts and get two answers! Some will say that if you see inflationary pressures increasing (such as now), that it is the time to buy your home and pay it back when dollars are 'cheaper'. There has already been a surge of investors, buying up homes for rental income..and finding great tenants in persons who have downsized, lost homes, or decided to stay on the sidelines during this tumultuous market. One of my customers says rental has never been better, his tenants are well qualified, rents are up, and with inflation, rents will be climbing. With 18 homes, he sees his tenants as his hedge against inflation.  Lakehomes command high rent, pretty much 'selling' themselves.

Lakeshore properties are seeing pressure downward for several reasons, and ironically holding their own somewhat for the same reason. Older owners are beginning to use their cabins and second homes less. If family members are not actively helping, the properties are often too time and energy consuming to keep up to the standards that these owners require. Many well loved properties are coming on the market at a time when interest rates are at incredibly low levels. An analyst yesterday was saying with the market crash of 8-4-11, he anticipates a possibility of 4.2% for a brief period coming soon, due to Treasury bond sales. The boomer's who have the cash, or the ability to secure financing, can buy a little piece of paradise at decent prices..and set up the family for years of memories before rates climb into inflationary realms. These buyers are looking and finding their dream lakehomes at great prices, many times complete with boat and furntiure!

When I purchased my first home, I paid 15% interest! When I sold, I made a great profit, inflation had help drive up the value of the home..rates had dropped, and I had maintained it. Will this happen in the current real estate market? Who knows! Did I take a risk as a young investor..sure. If I had rented during that time, I would have seen my rent outpace my income..purchasing had locked in my payment and provided some stability to my budget..

A strategy that has been becoming more frequent. extended families purchasing together. Whether larger homes, or large enough lakeside property that can have a second family build or camp..families are pooling their resources to acquire a 'place up north'. Sharing the costs and the enjoyment creates a great balance for many families! Throw in the garden, fishing and hunting, and you have t unique and timeless bonding over the generations. Is it time for a lakehome or cabin? Only your family knows what motivatations can drive that decison, and sometimes motivation has nothing to do with the economy, but everything to do with your heart! In Minnesota, the tradition of a lakehome to enjoy weekends, holidays and just plain escape time, is strong. I have never regretted purchasing my place on Rush Lake..and can't imagine that I will!