My former neighbor is a genius. Two years ago, he sold his Bay Area house for a very fat profit, and for the first time in 20 years, he and his wife became renters. His profit for owning the house for three years was tax-free, and was probably equal to the 35% that the house subsequently declined in value. This definitely fits the old expression of “having your cake and eating it.”
But wait a minute. There’s much more to the renting versus buying debate than money—particularly now since we are no long in the era of “Your house is your ATM”. Homeownership has reverted back to the warm and fuzzy “this is my castle” mentality. Conversely, a rental house (or apartment) is owned by someone else, and you as a renter, are given the limited rights of tenancy. True, someone else has to mow the lawn, fix the leaky roof, and apply paint to the peeling siding. Whether this gets done or not usually depends upon the motivation of the landlord.
Often when you drive through a neighborhood, you can spot the rental homes. They are the ones with the unkempt landscaping, cars in various states of repair in the driveway, and a few shingles missing from the roof. Persons who own their own homes tend to maintain them, while a renter has little motivation to do so. For many, renting is a short term proposition until they save enough for a down payment to buy a house. For others, it’s a lifelong perceived escape from home maintenance.
However, proper and routine home maintenance doesn’t have to fall somewhere between having a root canal and a 24/7 migraine. The key is to know what to do, and when to do it (or have it done by experts). When I wrote The National Home Maintenance Manual, I had the homeowner in mind who would rather play golf, go fishing or attend a concert. Everything in the book is laid out according to the components of the house, and the maintenance chart tells you when to do it and how difficult it is to do. And if that’s not enough, our website www.HouseFixIt.com has a free, downloadable 10 year schedule of home maintenance tasks. This enables you, as a homeowner, to plan your time and create a budget so you don’t get hit with unpleasant surprises down the road.
One of the great strengths of America has been that the middle class has been able to afford home ownership. The decline in property values over the past 24 months can be viewed as a positive adjustment to affordability.