Updated over 3 years ago on . Most recent reply
Keep or sell homes with the coming recession
My parents got a home in mountains
They want to turn it into a air bnb, but they got a really good deal on the house, and with the coming recession they could make a lot of profit by selling the home.
So they aren’t sure what to do, keep or sell, thank you for your feed back
Most Popular Reply
What are your real alternatives?
As you noted, they could sell, pay income taxes, and put the cash in the bank. With the cash in the bank it will lose ~8% per year to inflation. Without some other great investment to move to, this is a terrible choice.
If the AirBNB cannot generate positive cashflow, it was a bad decision from the start. They would be better off selling and going down a different path.
If the AirBNB provides positive cashflow, they get a return that way. Also, the inflation slowly eats away at the value of the mortgage on the property. Meanwhile, the mortgage is getting paid down by your renters. When you take the long view, this is a great way to go.