If he wants to throw money away.. try and at least convince him into a lease option.. that way you can limit your downside. By the time the least term is up, the strike price and market price will probably have seperated enough for the decision to be an easy one, that is.. keep renting.
People will probably freak that I’ve mentioned this.. but sometimes you can’t make the decisions you want, you have to compromise – I’m only suggesting this is compromise I’d consider if I were in your position.
Lease option from Wiki:
A lease purchase contract (also known as Lease Option) is a legal document that combines a basic lease contract with an option-to-purchase contract. The tenant/buyer pays to the landlord/seller a non-refundable option deposit that is applied to the purchase price of the home. The tenant/buyer then pays to the landlord/seller a sum that is typical to the rental amount usually on a monthly basis. A portion of that monthly payment is then applied to the purchase price of the home. During, or at the end of the lease period, the tenant/buyer has exclusive right to buy the home under the terms to which both parties have previously agreed.
Key part is “the tenant/buyer has the exclusive right” but is not required to purchase the home under the terms previously agreed. If you do not purchase the home, you lose your deposit.. so negotiating a reasonable deposit is important to whether this will be a good deal for you.
Regarding the tax part of your question, here’s another Wiki link:
“This type of lease can be structured so that the lessee can take the tax benefits as if he were the home owner.”
