It’s old, it creaks, and it leans hard to the right side of the property. So, why should you keep grandma’s house? The short answer: The value is in the land. Land is not an infinite thing. The planet is mostly water, and no more land mass is being created. Quite the contrary, it is projected that some land mass will be underwater due to global warming in a few short years. This makes land a valuable asset that can start generational wealth and a path to the American dream.

According to the Federal Reserve, the biggest transfer of wealth is happening now as the Baby Boom generation die and pass on their assets. Generational wealth is any asset passed down from generation to generation and in the case of Grandma’s house, has equity which can be leveraged to finance family business ventures and improve overall financial hygiene.

Compass Realtor, Sunny Jones said determining whether to sell or keep an elder’s home should be faced with one question in mind? How will the decision impact the next generation’s financial outlook? “If you plan to sell Grandma’s house and blow through all the money on clothes, cars, living it up, you might want to rethink your options. If your plan is to pay off debt and invest that money in other income-generating vehicles that work for your lifestyle, selling may be the best option,” Jones notes. “Let’s say for example you will buy an apartment building to build a larger portfolio and larger returns. This can be a smart strategy to accelerate the wealth building process for your family.”

The COVID-19 pandemic has reemphasized the need of generational wealth. Access to these assets were the lifeline for most after losing their jobs or receiving a pay cut.

Emily Moss and her colleagues at Brookings found that though wealth accumulates with age, the persistence of wealth gaps at every stage of the life cycle of African American further reflects disparities in the intergenerational transfer of wealth via inheritances. In addition to selling family properties – they were often done so at a loss, due to devaluing Black-owned property.

“Majority-black neighborhoods hold $609 billion in owner-occupied housing assets,” Brookings research concluded in 2018, and “in the average U.S. metropolitan area, homes in neighborhoods where the share of the population is 50 percent Black are valued at roughly half the price as homes in neighborhoods with no Black residents.”

The more involved answer to the question of whether or not to keep Grandma’s house: Invest in your history, if possible and work to renovate and maintain ownership. Historian Saul Dorsey said that because gaining access to property and maintaining family homes proved particularly difficult for Black families, undiscovered histories can be found in the bricks and mortar of Grandma’s home.

“We were born and died in our family homes, and many of those houses were built by the Black males of the family and community. These homes survived racial hostilities, banking discrimination, and city rezoning, in some instances,” Dorsey said. “We owe it to our forefathers and foremothers to hold fast to their properties.”

Dorsey and Moss suggest finding funds to modernize family homes, especially if they are located in historical districts. In many instances, local historical societies will assist in maintaining these structures. Applying for grants (money provided for a specific purpose, like adding solar panels), is also a good way to add equity to the home and keep it viable.

Finally, build on Grandma’s legacy through budgeting efforts, saving, and investing. Ensure future generations do not lose the wealth by preparing the successors to maintain it. Provide Black youth with an education not only in a trade or profession (plumbing or electrical work) that can ensure the upkeep of the home, but also in the economics of homeownership. Lastly, have your final affairs in order. Much generational wealth is lost due to fees associated with probate court. Create a will or trust and protect your family’s future.

https://washingtoninformer-newspack.newspackstaging.com/our-house-keeping-homes-black-owned-in-dc-wards-7-and-8/

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WI Guest Author

This correspondent is a guest contributor to The Washington Informer.

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