Ricky and his father have been arguing over what Ricky and his wife want to do with their rental property and their money. Dave says there should be no arguments, because the money and the property don't belong to his dad. He also gives Ricky advice on how to handle the financial side of the equation.
QUESTION: Ricky in San Diego, CA, is having an argument with his dad over real estate. Ricky and his wife currently own a rental property in addition to their home, and they’re trying to decide whether or not to sell the rental in order to pay off a big chunk of their mortgage. Their primary residence and the rental are their only debt, with $132,000 owed on the primary and about $80,000 owed on the rental. They make $110,000 a year, and Ricky says they could sell the rental for about $160,000. Dave walks Ricky through the financial possibilities and gives some advice on boundaries where family and friends are concerned.
ANSWER: I would love for you to listen to your dad for advice, but I would not be arguing with your dad about what you are going to do with your money. You’re a man. This is like I’m not going to argue with my friends about what I’m going to do with my money. I might have a discussion, I might seek counsel, and then I’m going to make a decision and do what I’m going to do. I don’t need to argue with anybody. It’s my money. There’s no argument needed. I don’t know if you just used the incorrect word there for how the discussion went down, but I wanted to kind of correct that as a boundary issue in your family.
No, I would not sell the rental today. I would pay your house down aggressively. When you get it paid down far enough that the sale of the rental would pay it off, then it’s a consideration. But if you’re making huge progress and you want to keep the rental while you pay down your house, that’s okay, too. You’re doing very well financially for a man your age in San Diego, California. You’re doing very well.
So today I would just begin to pay very aggressively on your home. When you get it paid down, then you’ve got a discussion to have.