Manataba Messenger

Page 16 When in Doubt, Save Dear Dr. Per Cap: We’re about six months into the coron- avirus pandemic and times are still tough. I’ve been furloughed from the casino and unemployment insurance only goes so far. Any idea when the economy is going to come back? Signed, Doubling Down Dear Doubling I’ll give it to you straight. I think we’re in for a long haul with the coronavirus, at least through the end of 2020; especially in parts of Indian Country where communi- ties have been hit hard by the pandemic. A huge factor in how well the economy holds up depends on how quickly we’ll have a vaccine for COVID-19. Some experts warn it could take at least a year while others are more optimistic. At this point it’s probably anybody’s guess but fortunately we have some of the brightest minds from all over the world working round the clock on the challenge. In the meantime folks who have been laid off or furloughed definitely need to keep hunkering down financially. Avoid large purchases if possible, pricey vacations, and other luxuries. I realize you might not have much choice. Every pow wow and Native summer event I know of has been canceled and many popular vacation des- tinations are either closed or only open to a limited number of visitors. I’ve always sworn by the saying “When in doubt, save your money.” I think that holds true now more than ever. Obviously we’ve never lived through something like COVID-19 before but let’s also not forget that many of our grandpar- ents and great grandparents did. We all know how small pox ravaged our ances- tors but we don’t even need to go that far back. I recently asked my aunt, who is in her eighties, if she remembered her par- ents ever talking about the Spanish Flu of 1918. She told me a couple of heart wrenching stories of what life was like at the pueblos during that awful time. We can draw strength from what those old folks had to overcome so we could be here today. Let’s also remember to pace ourselves - financially as well as emotionally. Back in March when the lockdowns started there was a ton of information going out with resources for coping; how to access bene- fits, where to get tested, what to do if you’re feeling lonely or depressed, etc. But since then I feel like there isn’t as much focus on support. This concerns me because I think we need encouragement now more than ever. Were almost six months in and still have a ways to go. Like most challenges in life, this is a marathon not a sprint. Stay well. Where to buy? Dear Dr. Per Cap: My husband and I are planning to buy a house in the next year. I want to live off the reservation but my hub insists we’ll save money if we build on the rez. What’s your take? Signed, Suzie Homebuyer Dear Suzie You ask a burning question that impacts many Native homebuyers. There are pros and cons to both options so let’s start with buying a home on the rez. Also, let’s clar- ify that usually when we speak of land on a reservation we’re talking about trust land and when we refer to land off a reser- vation we’re talking about fee simple land. A major advantage to owning a home on trust land is the fact that you won’t owe property taxes like you will on fee land. This alone can save a homeowner thou- sands of dollars a year. Moreover, unlike a mortgage payment property taxes usual- ly increase over time and they don’t go away even after a mortgage is paid off. Most homes on trust land also cost less than comparably sized homes on fee land. One reason is because homeowners often don’t pay for trust land on which a home is built. Instead the land is inherited, gift- ed, or leased for a small amount. That’s rarely the case with fee land for which 25% of the purchase price of a home can go toward just the land itself. There are other advantages to living on trust land. Some tribes provide services and programs at no cost to homeowners such as grading and paving for driveways, building infrastructure like water and power lines, and down payment assis- tance. Moreover in many states if you work a job based on the reservation where you reside, that income is exempt from state tax. So owning a home on trust land can defi- nitely save you money. However, if a per- son is looking at a home strictly as a finan- cial investment owning on fee land is usu- ally a better way to go. That’s because a house on fee land will usually appreciate or increase in value over time. One reason for this is an established market to buy and sell homes. On fee land you can sell a home to anyone willing to buy it, not just a tribal member. You can also borrow against the home by using it as collateral, something very difficult to do on trust land. Just bear in mind it might take time for your investment in a home to pan out. Here’s an example. Back in the 1950’s my grandfather retired as a teacher at the Santa Fe Indian School. He and my grand- mother bought a brand new house in Albuquerque, 1300 square feet with three bedrooms for get this – $5,000. Later my aunt inherited the home and sold it the early 2000’s for over $200,000. Yes, you read that right. Now I admit than even adjusting for inflation a typical home was much more affordable back when Elvis was singing Blue Suede Shoes than today but still – we just don’t see homes appreci- ate on trust land like they do on fee land. But money is only part of your decision. Ultimately the question you and your hus- band must answer is “Where will we both be happiest?” The answer could depend on living near friends and relatives or par- ticipating in tribal gatherings, spiritual and cultural doings, and hometown bas- ketball games. In short how much to do you value living in a tribal community vs a non-tribal community? We moved from a tribal community and bought a house in the city about four years ago. For our family fee simple was the way to go, but there are those days when I miss running into family at the grocery store. As Native people we all balance similar choices. Be wise while pursuing the dream of homeownership! —————————————————— Ask Dr. Per Cap is a program funded by First Nations Development Institute with assistance from the FINRA Investor Education Foundation. For more infor- mation, visit www.firstnations.org . To send a question to Dr. Per Cap, email askdrpercap@firstnations.org.