Mixed feelings here today – I’m on the road, sitting in a Starbuck’s in Alabama after travelling down here to sell my house. I’m listening to David Bowie’s Changes, as I did when I first decided to leave Alabama a year ago, so there’s a certain kind of symmetry. I spent 10 years living here and I already left once last year to move to Michigan and it feels like that all over again. It’s been great seeing some old friends again though.
I bought the house in 2004 for $143,000 and I’m selling it 10 years later for $135,000. So as an investment, it’s not been a great deal. Or was it?
As with all things, it’s a matter of perspective. Here’s my estimate of the total cost of house ownership over the 10 years that I lived in it.
The money I received after paying the mortgage was $38,000. So my total accommodation cost was $102,000 – $38,000 or $64,000.
This amounts to about $560 a month and excludes the additional tax benefits from interest deduction. Renting a similar house would have cost maybe $1500 a month or about $170,000, although there likely wouldn’t have been any significant repair / remodeling costs.
So despite selling the house at a “loss”, I think it’s still a win – it’s going to improve my cash flow by about $800 a month, and I won’t have to worry about another house halfway across the country any more.
I did consider renting the house instead of selling it, but ultimately I didn’t want the hassle and my experience in selling this house which was on the market for over a year hasn’t endeared me to real estate investing. For the moment I’m happy owning a tiny part of Marriot [MAR] and if I do get the urge to invest in real estate, there’s always Monopoly and failing that, REITs.
While thinking about house ownership and realizing that I’m about the least-handy person with any kind of repairs, a chapter in Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Revised and Updated for the 21st Century  has made me re-think DIY and work around the house as a money saving tool; usually I’d be on the phone for the nearest professional when something needs work.
</usual plea for comments> Do you own an investment property or REITs or otherwise would consider it for passive income?
The wisest rule in investment is: when others are selling, buy. When others are buying, sell. Usually, of course, we do the opposite. When everyone else is buying, we assume they know something we don’t, so we buy. Then people start selling, panic sets in, and we sell too.
 Got to love concise book titles that just roll off the tongue.