An Interesting Question

It is on my mind these days, to do the right thing. To know what the right thing is, in these days when the options all seem wrong.

I was thinking back on my very first house, the one that started my love affair with home ownership, with its ratty carpet and drapes, unkept yards with swampy corners and dense overgrown brush. I squeaked into the world of home ownership with a bit of a fudge for including a modest monthly dividend to my income knowing it was to be cashed in for the down. Otherwise, we would have missed out by $35.

Over the next six years, Loretto was scrubbed and painted and renovated and landscaped into a home, and sold to neighbors for a modest profit which was rolled into house number two. (They made over $100K just three short years later in the housing boom of the late 80s, and moved to a bigger more posh place in Santa Rosa.)

Timing is everything, as evidence by the purchase of a new home in Phoenix, at the top of the bubble that Charles Keating caused by speculative land purchases for which he spent six years in prison. All homes are down, plus $20K more of improvements and landscaping are giveaways with a job transfer. We were *relieved* to sell by owner just below what was owed.

We bought in Ohio by owner and sold it by owner, all in 10 months. Damn fool judgment and lack of adaptability caused this yoyo move. We shot back to CA as a contented renter until an additional $10K tax bill depleted what little savings there was and we realized a tax shelter was badly needed.

House 4 was Amaretto, with fifty wild rose bushes, ratty carpet and drapes, unkept yards with dense overgrown brush. Again, a slow and steady approach to discovering a home, scrub*paint*renovate*landscape, and somewhere to raise the kids. Only this time the big dividends came around and it was us who moved them forward into house 5.

Dunstan went up up up, before the current economic tailspin. Now the down payment and improvements are part of the loss differential for those in the unfortunate position to need to sell. Thank God we aren't.

The advantage of a tax shelter is big, but the home ownership math is compelling, too. So what makes it so alluring ... and when owning doesn't pan out, what prompts a return to do it over and over again?

House 1: gain at sale $0K
House 2: loss at sale $35K
House 3: loss at sale $10K
House 4: gain at sale $40K
House 5: currently in loss mode but no plans to sell

That's an interesting question.