by Triple Water Astrology

Created on: February 04, 2007   Last Updated: April 18, 2007

Few topics evoke more emotions among Americans than the issue of buying a house. After all, without a house, you don't have the American dream, right? Renting an apartment makes sense for many Americans and not necessarily because you can't afford a mortgage.

The hidden costs of home ownership make apartments a sensible alternative. Consider:

1) Property taxes. True, cities with property taxes also tax apartments, but the cost is included in the rent. Your mortgage payment does not include property taxes, which can be rather expensive.

2) Maintenance costs. Need a plumber or electrician? When something goes wrong in my apartment I call the landlord. It's their property, they pay for maintenance. I don't even have to buy an air filter. When the furnace in your house goes on the fritz, be prepared to pay up.

3) Insurance. Renters' insurance does not have to cover the property, just you possessions. Obviously the insurance company will want to charge you more to insure your roof or insure your home against a fire.

4) Your time. I do not rake leaves, mow the grass or shovel snow. Besides the fact that I don't like doing those activities, they cost money for supplies or to hire someone else to do it.

5) Squabbles with neighbors. How much easier is it to move from an apartment than a house? You have to sell your house. You just have to wait for the lease to end on your apartment.

6) Inflation. Do homes really go up in value that much? Consider inflation. If a house goes up in value by 4% this year, it's worth the same as it was last year in last year's dollars.

7) Interest. When you borrow money, you pay interest. You have to consider this when you pay for your house. A $150,000 house can easily cost way over $200,000 when you pay it off over 15 to 30 years.

8) Real estate fees. Have you sent a Christmas card to your real estate agent? They're not high on my popularity list. I'm not exactly sure what it is they do, but they receive an awful big chunk of your hard-earned money when you sell your house.

Many people are genuinely happy in a house, and many people have made very handsome incomes by dealing in real estate. But house prices do not always go up, and few people consider all of the costs when they buy instead of rent. When you have a house, you're never really done paying for it (in terms of your time, repairs, taxes, and other "negative compounding").

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