I’ve always felt that buying a home when I was young made sense. I know putting money in the stock market instead of buying a house can be more profitable, but I didn’t have any money at the time so that really wasn’t an option for me.
When I was starting out and working at Fidelity Investments, I worked out a deal to buy a three-family house with very little of my own money. I remember how hard it was asking my dad for a loan (it was less than $5,000) and working out the payment schedule.
I rented out the top two units and lived in the bottom one, renting two of the three bedrooms in my unit to a colleague and a college buddy. I paid my dad back within the first year and I sold the property a few years after that. And with the proceeds from the sale Becky and I had the down payment for our first home in Newport, RI.
In my case, buying a home turned out to be a great investment for my family. Our home has provided a lot of memories and peace of mind. But what will we do if we want to get access to the equity we’ve built up?
I don’t think there’s one right answer, but I can tell you I don’t trust the guy on the billboard with the 1-800 number selling reverse mortgages. No thanks.
But the more I read about single family homes being snapped up by Real Estate Investment Trusts or REITs, the more I want to be on the other side of that wager. The WSJ reported over the weekend that there are 14.9 million single-family homes occupied by renters—a 31% increase since 2006.
Why not sell into this market before the next real estate crash?
If you do sell, you’ll have a pile of cash to rent a single family home wherever you want to live without the headaches of homeownership. Yes, the sentimental value of keeping the home you raised your children in is huge. But why not stay at their house for a change?
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