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This review originally appeared in Real Estate investor’s Monthly.

Return with us now to those thrilling days of yesteryear when inflation was good for real estate, people used printed tables to calculate mortgage payments, depreciation was determined by useful lives, and savings and loans made income property mortgages. How? By reading Milt Tanzer's book, which is Copyright 1996!

I felt like an archaeologist reading this recently-published book. It not only spouts the Realtor® party line (Tanzer is a CCIM, which is a Realtor® designation), it's the 1981 Realtor® party line! That was the first year of its thirteen printings, and apparently the last year it was fundamentally revised.

The 1981 Realtor® party line

The 1981 investment Realtor® party line goes like this. Real estate is the best investment because it protects you from inflation, which runs 4 to 10% a year. You can use leverage, namely a 75% loan-to-value ratio mortgage from your local savings and loan. People who save and invest in CDs and such end up in poverty at age 65. Those who invest in real estate end up rich. Sell around every five years to restore your depreciation. Use "professional" property management, preferably a Certified Property Manager (another Realtor® subsidiary). Investing as a limited partner in syndications is a great way to buy real estate. Wraparound mortgages increase the seller's yield.

This is blather. Some of it is out of date. Some was never true to begin with.

Tanzer is a lifelong seller of real estate and he has precisely the biases you would expect of a career salesman: use professionals, churn your properties, you can't go wrong.

Out-of-date real estate dictionary that is not in alphabetical order

I have often said that the vast majority of real-estate-investment books are really just real-estate dictionaries that are not in alphabetical order. This is yet another of those, only it's a new variety: an out-of-date dictionary.

For the record, here is my current take on the 1981 investment Realtor® party line.

Real estate has advantages and disadvantages. It used to benefit from inflation in the late seventies when inflation was very high and mortgage interest rates stayed low. Neither has occurred since then. Long-term financing for income property other than from HUD is on-again, off-again, mostly off. People who save and invest in CDs and such end up affluent at age 65, not because of their high return, but because of their savings. Those who invest in real estate end up rich, poor, or in-between depending upon both their skill and luck. Avoid selling at all because of high transaction costs. You can get additional depreciation from new acquisitions, if the passive-loss limits will let you use the deductions. Manage your properties yourself. "Professional" management is typically negligent and dishonest.

Investing as a limited partner in syndications turned out to be one of the most disastrous ways to buy real estate that ever existed. The Realtor® subsidiary that did that is not even in business anymore. Wraparound mortgages have no substantive effect except in certain cases in which the seller is trying to avoid paying tax on excess loans over basis by taking advantage of the Stonecrest line of court cases and related authorities.

Tanzer says leasing space to your own professional corporation gives you tremendous tax advantages. No, it doesn't. The only tax savings stem from stretching the definitions of "reasonable" salary and rent.