Buying Rental Property from Mom

[Andrew Agosto]

My mom is retired. She took over a few rental properties when my father died and it's been a nice source of income for her since they are paid off. However, she has expressed interest in being done with the landlord thing and has asked about my interest in buying. At the time I said no because they're not that convenient of properties for me and they provide good cash flow for her. But now I'm giving it a second thought that perhaps I could buy, give her a chunk of change up front and work out a loan to provide some steady income for her, skip the banks and start locking in any appreciation now (and not have to share it with my sister someday). Does anyone have any thoughts or experience on this? Other things to consider? Tax implications etc.?

[Bill B.]

If she’s owned these for years she will owe a boat load of taxes and depreciation recapture that she wouldn’t owe if she just left them to you when she passed. If you wouldn’t buy them from a stranger you shouldn’t buy them. If she wouldn’t sell them to a stranger she shouldn’t sell them.