I have in my possession every single piece of real property I have ever owned.
Which is to say, I own a two bedroom, 900 square foot, single family residence in a dying coastal timber town four hours away from the urban center where I've lived for the past 16 years. And I own (OK, I'm buying) the home in which I've resided for the past 14 years.
The coastal home is paid for. It is tax assessed at $136,000. I could probably get a little more for it because it is in a good neighborhood. However, since I've been renting it out and taking depreciation for the past 14 years, the capital gains will be substantial. It was my first home, purchased in 1976 at age 28 for the huge sum of $ 16,900. I had to assume the first mortgage and come up with a second one just to cover the down payment. I recall struggling with the question of home ownership and whether it was worth that kind of expense.
In 1990, with both parents now deceased (they lived just blocks from my home) and children who needed more than the small town school system could offer, I moved to the big city. My mother's death had left me with a small inheritance, which I used two years later as a down payment on the home in which I now live.
So, I hung onto my first home. It is easily rented. I've had four renters in 16 years, and every time one left, they brought me the next tenant. My current tenant is the son of the previous tenant, who was the best friend of the tenant before that. They have all been handy and willing to make repairs as needed.
This year, and probably part of next year, I'll be running into some expenses. The tub and enclosure in the bathroom needs to be replaced, as do most of the windows in the home. The exterior needs painting. I'm probably looking at about $10,000 to cover everything. The rent definitely will not cover that--in fact, the rent will not cover half that once I pay for taxes and insurance for the year. I intend to free up as much money as I can to pay these costs on an as-needed basis. Yet, realistically, at some point, I will have to access my HELOCC. That means my debt is going to go up.
So why keep the home? NCN of No Credit Needed asked me that question when I first started this blog. (Read his comment here.) I have no real answer. Or rather, I have answers but they are all emotional. I love that house. It was not only my first home, but it was and remains perfect--small, well-planned, energy efficient.
When I first moved, I was unsure of my new job, unsure if I'd like living permanently in a city, unsure how it would be for my children. Then I was seduced by urban living.
Now, it's just that I like knowing that I have a fallback position should my world suddenly go crazy. I can live mortgage free in that house if I have to. I don't imagine my life will ever come to that, but I find it hard to give up the safety net.
The house itself is not going down in value. The town's timber industry may be dying, but tourists to the coast are driving up prices everywhere.
I'm the kind of person who saved all the dolls I played with as a child, and have journals going back to fourth grade. Why can't I save my houses, too?