4/18/10: Does It Still Make Sense to Own Your Own Home?

Home ownership is the American Dream.  Or is it? For many, home ownership has turned out to be a nightmare.  So we decided to examine the pros and cons of owning the roof over your head.

In the house for today’s show:
•    Your Host, Robert Helms
•    Co-House and Chief Housekeeper, Russell Gray
•    The “Godfather of Real Estate”, Bob Helms

You know the world is changing when the sacred and indisputable wisdom of owning your own home is called into question – especially by guys like us who LOVE real estate!  So what gives?

As investors, we look at real estate as a financial vehicle.  We buy it to produce a particular financial outcome.

However, many people also look at their home as “investments”, but a home is so much more.  Robert Kiyosaki says your home is a liability because it takes money out of your pocket.  Others argue that if your house is going up in value faster than you’re putting money into it, that it’s actually an investment.  Both are valid perspectives.  So we start this broadcast by posing the question:  If the house is NOT going up in value, does it still make sense to own your home?

On its face, this seems like a financial question.  So the next topic of discussion revolves around doing the math and comparing the value proposition of owning versus renting.  It’s hard to do the math on the radio, but if you listen really hard, you can do it.  Or as Led Zeppelin says, “The tune will come to you at last.”

But there’s more to the analysis than just comparing rent to a mortgage payment, so we delve into fun topics like liability, financial responsibility, privacy and more.  Hey, no one said thinking was easy!

While every investor knows not to get emotionally involved with a property, it’s much harder to maintain such a discipline when home is involved.  Bob and Robert sold residential real estate for many years.  They understand very well the emotional attachments people can have to a piece of real estate and how they affect financial decisions.  To make a good decision, do you need to leave your emotional baggage at the curb?  Or do you place a financial value on intangible considerations and then factor them into your equation?

The show wraps up with talk about the emotional considerations beyond the finances.  If you’re an investor dealing with residential property, it’s important to understand how emotional attachments can affect you, a seller, a buyer or a tenant in terms of the financial price one is willing to pay in order to own, dispose of or enjoy a piece of property. Every person, situation and property is different and the human element is what makes real estate so very interesting and potentially profitable.

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