- The Washington Times - Friday, September 7, 2001

I'm an unadulterated fan of homeownership and will always hop on the bandwagon for people who slice up a piece of the American Dream to become part owners of this country through real estate.

There are some downsides although they are outweighed by the advantages, in my opinion to owning your own home. To be fair, however, I'm listing them here, so that potential homeowners can conduct a true pro/con comparison as they try to decide whether to buy a house or continue renting.

I do want to point out that 51 weeks out of the year, this column will be a cheerleading section for homeownership. But for today, here are the "Five Reasons I Love to Hate Homeownership."

1. Owning it means fixing it. As a renter, if the water heater flooded my apartment, I simply slogged through the ankle-deep water, picked up the phone and vented my frustration on the landlord. Mr. Repairman would show up in a matter of hours with a new water heater in tow, while Mr. Fix-it-man would wet-vac my apartment clean.

Now when there are major household breakdowns, it's up to me, Mr. Homeowner, to sweat out the mishaps, drive to the hardware store, interrogate the orange-aproned clerk about which elbow joint is the right one for the job, install the water heater/air conditioner/appliance, and worst of all pay for it with my hard-earned plastic.

2. The tax man keeps on comin'. Even though real estate taxes are deductible from my overall income, the way I look at deductions is you have to spend the money to get the deduction. Call me cheap, but I'd rather hold on to my money in the first place, thank you very much.

Nevertheless, homeownership means a bigger tax bill. When you make your monthly payment, it is based on PITI, or principal, interest, taxes and insurance. The taxes can be quite hefty thousands of dollars a year. And that's something I didn't have to pay when I was renting. In addition, just to get into the house costs me more taxes and when I refinance, it costs even more with transfer, recordation and various other taxes from the state and county.

3. Golden handcuffs are tight. As a homeowner, I have a vested interest in my neighborhood. This means I can't just cut my losses and run when something bad goes down in the development.

A year after buying my first condo, I came home from work one evening to find yellow police tape around the whole parking lot. I couldn't drive my car in, nor would the authorities allow me to enter my building. There had been a shooting in the parking lot between a drug dealer and a competitor or angered user.

I wanted to move my family from there as quickly as possible but this was not to happen. We owned. We couldn't just pack up and move, with only a security deposit to lose. We had put more than $5,000 into the purchase of this dwelling and the market had since dropped, so we stayed.

Now, I understand, that with a more active Neighborhood Watch program and an activist condo owners association in place, that community is pretty much crime-free.

4. Risk of market drop. The above example shows another situation that sends shivers down my spine the fear of the market dropping and all my investment in this house going down the drain. (But have you noticed, renters never think about how much money they're losing every year through rental payments…. Oops, I temporarily reverted to cheerleader mode.)

If you buy a stock low, you obviously want it to sell high. The same is true with real estate. But when a house drops in price, it usually takes awhile for it to return to the higher value. It's a long-term investment, and that's something homeowners must be comfortable with riding out the lows.

5. Miscellaneous fears. Bad neighbors, survey problems, acts of God, moles in the yard, dry rot, wet rot, termites, carpenter ants, lead-based paint, burst pipes, planes falling from the sky, eminent domain. If you have a vested interest in a piece of real estate, you can work yourself into a lather by worrying about all sorts of miscellaneous things that can happen to your little castle. But I have found it just comes with the territory.

There, I did it. Naysayers can now be quieted in their complaints that I never say anything bad about homeownership (but I had to think really hard to compile this list). Next week, I'll be back on track with why homeownership should be a must in the wealth-building plans of your financial life.

M. Anthony Carr has written about real estate for the past 12 years. Send questions or comments by e-mail ([email protected]).


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