"I have a question for you!! If you use my question in an article,
please omit my last name! I am currently living in a mobile home that is paid
for and has controlled rent. I can afford to buy a house but really have no
desire at the present moment. The situation that I’m in has allowed me to
save a good percentage of my income and invest. I’m 33 and would like to
buy in a few years. Am I making a mistake? Am I losing out on a great tax
break??? Is the tax break really what it is cracked up to be? The market
in California is soft and I’m guessing that the environment will not change
drastically anytime soon. Please let me know what you think!!!!" -- Ken
Hmmm. Two conflicting things here. On the one hand, based on this sketchy
info, I’d suggest that now -- when the market for homes is soft -- might be
a good time to buy one. I wouldn’t be surprised to see California real
estate prices pick up again. I think it’s already happening. Relatively
speaking, stocks are pretty high and some California real estate
prices not so high. A better time to buy a home rather than more
shares of Coke? (A decade ago, you would surely have done better buying
the Coke than the home.)
Then again, if you’re happy where you are and can continue adding to your
investment portfolio, keep squirreling it away! Have you read The
Millionaire Next Door? They got rich at least in part by living beneath
their means.
In any event, I wouldn’t buy the house for the tax deduction. It helps you
afford the mortgage and property taxes, and should certainly be taken into
account when you figure what home ownership would cost you. (Also take into
account repairs, insurance, lawn maintenance, repairs, utilities, painting
every few years, plumbing problems and repairs.) Alone, though, the tax
deduction is no reason to buy a house.
