Monday, October 24, 2016

real estate and real life

There seems to be an endless real-estate debate over the virtues of renting versus owning. Being indecisive and uncommittal myself I understand the pros and cons of both sides and as with many issues tend to be a fence sitter.

When I got out of the military and snagged a nice-paying contractor job, I had by that point been sucked into the conventional American dream of owning a single-family home.

We ended up in a small townhouse, however, shortly after buying our home, glaring problems started to surface that we hadn't seen with our inexperienced, first-time-buyer's starry eyes. In the first year we needed the roof reshingled and gutters redone, and the fire-hazard electrical box, missing bedroom ceiling lights, and ancient water-wasting toilets were also replaced. In the second year the basement, hastily and cheaply carpeted by flippers, flooded badly due to a tropical storm. We ended up getting the entire room down there re-walled and re-floored (with porcelain tiles and proper 5/8ths-inch mold-resistant drywall, to minimize risks of future expensive headaches). The third year we had to replace the heat pump.

There are many shoddily-done parts of the house that we still plan to renovate. Some are choices that we could get by without doing, which leads to the "temptation to upgrade" argument against owning.

I've heard it said that if you're not particularly handy or inclined to be, then you're probably better off renting over owning because the maintenance costs will rob you blind. Costs that could've been money put to better use elsewhere. I wonder how many people feel the weight of that statement as heavily as DH and I do.

So while we are content in the house (for now), I find myself often wishing we'd opted for renting an apartment from the newer complex in the neighborhood. The rent for a two-bedroom would've been a couple hundred more than our current mortgage payment, but if you factor in HOA fees plus a monthly average for all the upgrades and repairs, renting there comes out much more cost effective.

On the other hand I will concede that it does feel good to "build equity" as opposed to handing money to a landlord indefinitely. (But I'll also concede that arguments of that being a psychological trap are fair.) Additionally rent rates tend to drift uncomfortably upward which could undo potential cost benefits. I do heap a good pile of cash on the principal each year with the goal of both increasing equity and decreasing the total interest cost at the end. The tax deduction is also some consolation for the headaches of owning.

I will also admit to the anchored-down feeling that home-owning gives, which grates against DH's and my desires to keep moving around and having new adventures. Having a kid seems to counterbalance that a bit; instilling an increased desire for stability over adventure. And since we're both bringing home robust salaries from very tolerable jobs, for now we're content to stick it out in this house for a while.

In the end, we've grown content to appreciate the mortgaged house for what it is, at least for the medium-term future. But, I also think renting that apartment in the neighborhood could very well have fostered a similar (if not greater) contentment with our living arrangement. Live and learn.

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