Dr. Garth

Hard to believe the Dr. has been at this for the past sixteen years. But here we are. Still ruining lives with dodgy advice in 2024.

Hey, here’s a young woman we dissed five long years ago, warning her then about the dangerous co-mingling of affection and finance. Did she learn anything?

“This is “Cathy” the ‘country moister’ you wrote about in May of 2019,” she states. “I didn’t reconcile with the GTA wiener and have now found love in London, Ontario.”

Good. So wassup?

“We rent, of course, with no hopes of getting into the housing market. My partner’s dad would like to help with that though. He has a rental property that he wants to sell to us for a lower price so he can retire. The house needs some fixing up and updates. He also wants to save up for when we inherit his wife’s (partner’s stepmom) primary home, a beautiful historic home. It needs even more work to get rid of decades of cigarette smoke in the walls and basic upgrades.

“Is buying/inheriting two old houses in need of repairs a good or bad idea? Would it be wiser to tell him to sell the properties and take the cash instead? The century home is beautiful and comes with a lot of land for being in the city, but neither my partner and I are handy and I think we’d go into big debt fixing up this place. Renting is expensive and uncertain, but renovating can come with pricey surprises, especially if we aren’t benefiting from the sale of the house once dad-in-law is gone. What would be the wise thing to do for these thirty-something moisters who just want to settle down?”

Seen this movie before, Cath. ‘Benevolent’ family members trying to foist off their sketchy rental real estate on younger (inexperienced) ones, offering them a ‘deal’. In reality, they can’t sell or cannot be bothered to go through the listing process. Sometimes they’re incapable of delivering vacant possession because of ensconced, testy tenants. As for price, the ‘bargain’ ends up being market price, considering the commission they’d have to pay to go MLS.

So, careful. One of the rules around this pathetic blog is to never buy real estate with anyone you haven’t slept with. A corollary is to have a healthy suspicion of the father of the guy you haven’t yet married (and maybe won’t cuz he, also, could be a wiener) who wants to shunt off his broken house to you. Just saying.

In any case, don’t. Old houses are money pits. Reno costs for non-DIYers are extreme. You have no real idea of the total cost until you’re into it, and then a retreat may be impossible. If he’s truly a guy with your best interests at heart, he won’t be looking for you to finance his retirement. Instead he should go to market, dump the places and then gift you cash, which you can use as a downpayment. But only after the wedding.

Now let’s check in and see how the rich GenX people are doing. “I have been a regular reader of your blog since 2017,” reads Jeremy’s MSU. “Thank you for your great contributions to my financial literacy; your perspectives have taught me so much in this realm and I am grateful for that.”

The background information: We live in Vancouver, I am 42 earning 100k/yr. My wife earns 110k with a DB pension. She plans to stay with her employer and retire at 55 with full pension. I am in the creative industry and the future feels very uncertain with the rise of AI. We live in a 3bdm townhouse currently valued at ~1.4M and the mortgage will be paid off next year. Liquid net worth is ~1.7M due to early inheritance and strong investment returns.

Now, I recognize I am in a very fortunate financial position but am curious to get your perspective on three possibilities under consideration: 1) Me semi-retiring early (still doing some casual work), 2) upgrading our principal residence by ~500k (more room for our 2 kids aged 2 and 4), 3) buying a cabin up to 3hrs away, up to $1M (truly a dream for me to have a cozy home away from home in nature). Would love to hear how you would handle things.

It sounds like you think you’re well-off enough to stop working and let The Wife do the heavy career-and-retirement lifting (because you have no pension and AI may eat your job) while you vegetate and photograph interesting moths in the woods. You also understand you won’t be able to retire on her pension, right?

With young kids, you have obligations. Giving up on employment in your early 40s is not a manly goal. Are their RESPs full yet? Do you really need a $2 million house at this stage? And in what universe does it make sense to spend a million on a cabin in the north country? Especially at a time when the BC government thinks multiple-property owners are evil enemies of the state?

How would I handle things? Send me your wife’s number. She can kick your ass.

About the picture: “It seems you may need a dog photo, if so please find attached Black lab Quincy and her Husky cross buddy Cal,” writes Sally From Mill Bay, Vancouver. “Cal is 11 and can run circles around her (4) but they enjoy hiking together. My husband has been an avid reader of your blog since inception which I believe was 2008 and since COVID I too am hooked. Thanks for sharing your wisdom, humour and perspective.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2024/08/21/dr-garth-44/