Things Finally Shifting

Whew!! This has been a roller-coaster year! My house was on the market and I got a bid. I’m keeping my fingers crossed, but it looks like it might just be a done deal. Just in case, I went and put a townhouse on hold that will be held until my closing date. If the closing falls apart, I’ll be out a security deposit, but the buyer will be out their earnest money. So, it’ll be a wash.

I have been debating for some time whether to go cheap and dingy or upgrade and nice for my home. I am not buying. The real estate market is very unstable, in my viewpoint, and that’s part of the reason I am selling now, and not two years from now when I will probably leave the area. Seeing as I can’t make enough in equity to pay a real estate commission after two years of owning a home if I did buy again, I am choosing to rent. I really like renting because there are no maintenance fees and you can get nicer digs than if you own. So, I got a really good deal – very high-end townhome and I am delighted! I’d never be able to afford this home if I bought since it comes with it’s own yard maintenance and all the maintenance indoors too. Adding up maintenance in my old home, I had spent more than the 1% they say to allow for maintenance. It was more like 2 to 3%. So, I figured I could use that money to upgrade my living arrangement, without having to deal with the headaches of arranging people to come and fix things for me all the time. That was like a part-time job in itself!

So, now, here’s the really funny thing. I am going to try to get a room mate for a spare room. I am going from a 1500 square foot home to a 2500 square foot townhome. I am paying about $600 extra in rent – BUT – I have that much more space and I plan on getting a roomie, who will pay – heh, heh, – $500/month. So, doing the math, and I just seriously upgraded for just $100 extra and no maintenance costs! I don’t even have to mow the lawn! I will be saving any where from $3000 to $6000 a year making this move, in maintenance costs alone.

So, for all those people who say renting is worse than buying, I say: Pooh! Pooh! I am really happy NOT to be a homeowner anymore and hopefully this deal will go through and I’ll never be a homeowner again! And, in case anyone is wondering, the housing market in Raleigh is taking a dive, I think. I had to pay closing costs for my buyer, something completely unheard of before. They have plenty of choices out there and the townhome area I went to had MANY rentals out and FOR SALE signs out too. Prices there are dropping too.

Did I mention I can still deduct a home office on my taxes even if I rent? Ha, ha, ha…It’s getting tougher and tougher to be a homeowner these days. From real estate taxes that increase while values drop to maintenance people who believe that, because gas prices have shot up, they are entitled to over $100 just for walking over your threshold, whether they fix your problem or not. I say: “Good riddance!!!”

Who Cares If It’s A Buyer’s Market In Raleigh?

I put my house up for sale this year. I bought it in 2001 and every time I think about putting it up for sale someone says:”Why would you do that? It’s a buyer’s market!” I don’t get the logic of this whole idea. Like, instead of making a financial decision based on what’s right for you, you have to make it based on what the environment or the media dictates to you? Yeah, I hear them screaming that Raleigh is the best place to own a home right now, the point is what will it be like next year?

I’ve been reading a lot of books on wealth creation because the universe is seeing fit to drop them in my lap for free, and I had the time this weekend to read them. Some experts argue that housing is not a good investment because after deducting taxes, interest, and maintenance, you’re often not beating other investments you could have had. Of course, you have leverage, but here’s the thing that’s we’ve all learned since the housing crashed in the rest of the country (excluding Raleigh), that leverage can work against you just as easily as it can work for you – especially in housing at this time!

So, here we are sitting pretty in Raleigh with a real estate market that hasn’t declined as much as the rest of the nation and yet I haven’t had a seller’s market since I bought this place. So, logically because this house is a loser in the sense that I am not in a seller’s market, I should hold on to it even longer and somehow think I will magically escape what the rest of the nation is going through. This is despite the fact that unemployment is up, housing prices only increased 1% over last year, and foreclosures went up 25% from last year. But, heck, I wouldn’t want to be caught ditching my losers! No, I should hold on to this very bad investment until the whole market collapses and I’m left holding the bag on the rest of a mortgage. The thought is sickening, and so much so, I am selling and moving into an apartment. I will have no maintenance fees, I will have no real estate taxes, and I have the freedom to move elsewhere at the drop of a hat. Not to mention that if I pay about the same amount of money on my rental as I did on my mortgage, I get a much nicer apartment than the house, I pull out the money that might disappear by next year due to potentially dropping prices, I pay off debt, and I’m free to concentrate on my business rather than babysit a house. And, I get to watch the housing market from the sidelines, where I am far more comfortable with the risk level.

Yep, that was one of the things I read in one of those books. The difference between winners and losers in the money game is that losers buy high and sell low (because they panic and can’t release a losing investment) and winners buy low and sell high. I will make a profit on this house and, frankly, I’m not greedy or stupid enough to think this market is about to turn into a seller’s market with the rest of the country in the housing doldrums.

*Photo courtesy of byrdiegyrl from Flickr Creative Commons