Don't Mess With Taxes

As regional real estate bubbles are popping, many folks are reassessing home ownership. That's not necessarily a bad idea.

True, in the long run, owning a home has lots of advantages, personal and financial. But owning property just to own it could be a costly mistake. I know several people, mostly younger folks, who as soon as they got married just had to buy that three-bedroom house in the 'burbs.

They didn't want to start with a small home or condo and build some equity and trade up. They had to have it all, right then. And in at least a couple of cases, they seriously overextended themselves to get into a house.

Was that the wrong move? I can't speak for them; I'm not balancing their checkbooks each month. But I know that the stair-stepping homeownership approach that the hubby and I took -- a small condo, small single family home, larger house, larger house, still larger house -- was right for us.

The key is to know your financial situation and work within it toward your dream home. You, and your mortgage lender, will sleep better.

So why am I reminiscing about our personal homeownership ventures? Because I just ran across this AP story that discusses why, for some, renting is better than buying.

The story quotes financial planner Brian T. Jones, author of "Getting Started -- The Financial Guide for a Younger Generation," as saying that the key to making the move from renting to buying is cash flow: "People need to make sure they have the money not only for the mortgage but for other expenses that come with ownership."

Those other expenses include real estate taxes (which can be a huge bite), insurance (another substantial outlay, especially in storm-prone areas) and repair and maintenance costs (something a lot of folks overlook, as I noted in Getting and keeping).

This isn't to say you should give up your goal of owning your own place. Just create an attainable plan to get through the door:

• Start saving for a down payment.
• Put a little more aside as your in-house fund for when you get there.
• Be realistic about what you can afford right now vs. what you want.

And remember that while a house generally is a good long-term investment, you shouldn't look at it only from that financial point of view. This will be your home, at least for a while.

Make sure it truly is the house that makes you happy.