Is it realistic to buy this house? (Long post)

My dad is retired and mom is deceased. When it’s all said and done, he earns just shy of $9,000 a month post-tax which is comprised of a pension and social security. This is before accounting for his retirement account which I will discuss below.

He owns his apartment in a VHCOL which was purchased in the 1970s and a small house in a vacation-y, HCOL area with a mortgage of $1400 a month. In that house, he has a tenant in there that pays $1360 a month rent. The tenant has been there since the early 2000s and his rent has been raised, I think, twice in that time (and always by a negligible amount. The last time it was raised, it was raised by $60). There is a house literally right next to ours on the same block that rents for $4,000 a month. He doesn’t want to raise his tenant’s rent, nor does he want to give him notice to leave so he can find a higher paying tenant. He would rather keep the tenant because he has paid on time and never missed rent once. My dad also likes to go out and garden and the tenant lets him do so. But he’s literally losing money every month for what, the privilege of going out once a week and gardening? In my opinion, he doesn’t have to charge $4,000 a month but he is literally just leaving money on the table by not raising this rent.

Now, normally this wouldn’t be a problem but I should stop here and say that my father is extremely frugal. He will complain about the price of toilet paper and it will gnaw away at him all day. He is constantly checking his bank account balance and his 401k and will complain that he is in a low-risk portfolio and making almost no money. His 401k has just shy of $500,000 in it. Additionally, literally just sitting in his checking account doing nothing for him is another $120,000.

There is a house for sale in an extremely good neighborhood for $600,000. This neighborhood is about 5 miles away from one of the most exclusive parts of our state (and about 30 minutes away from his house), and within 10 years it is likely that this neighborhood will be so expensive that it’s impossible to purchase in. It is priced to sell quickly because it is part of an estate. The house is immaculate and move-in ready.

My brother and I think he should buy this house, especially since he has an 800+ credit score. He should take the money in his checking account and half his 401k, put down $300,000, have a $2,700 mortgage and rent this house out. He will make more money doing this than sitting on a 401k he doesn’t take money out of and money in the bank he does nothing with. This home is in an area where houses rent for $6,000+ a month and in the summer he could conceivably rent it for two months at $10,000 each month.

He recognizes that it’s a good idea but he says he doesn’t want to be left with nothing. However, he would still have half his 401k and he’ll still have a guaranteed $9,000 a month. His co-op where he lives is fully paid for and maintenance is $1080 a month so he will never ever be homeless (if it ever came to that, I would 100% pay all of his expenses so he never had to worry). He doesn’t want to take on the risk but to my brother and I, it’s crystal clear that he should buy this house. I’m willing to contribute to the down payment. Are we missing something?