Here is my current plan:
Avoid selling in short term. We consider our house a place to live, not an investment. Our house was purchased in 2003, with plans of staying for a decade or more. I don't expect any more job relocation with my company. We like our neighbors, proximity to shopping and the general area. Our house is a great match for our lifestyle and potential family growth. The school system is excellent.
Count on our margin of safety. We made a 40% down payment on our house and borrowed 60%. Also, we did a 30 year mortgage, even though we planned to pay it off in 15 years. By doing this, we kept our mortgage payment less than 13% of our monthly income. Also, we have an emergency fund that can cover at least a year of expenses, including our mortgage payment.
Reduce real estate tax. In the event our house value declines significantly, I will petition for a reassessment of our property. If accepted, our real estate tax would be lowered significantly.
Identify investment opportunities. When there is crisis, there is also opportunity. I am still contemplating how I could have profited from the housing and subprime collapse. I have seen a significant increase in foreclosures in my area. One of my wife's cousins has found a reasonable approach for foreclosure purchases. He rents his properties with option to buy, providing income and giving the buyer the opportunity to build equity before the final purchase.
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This is not financial, real estate or investing advice. Please consult a professional advisor.
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