OWNing is really everything

On the first day of this exciting New Year I was anxious to check out the lineup on Oprah’s new television channel, OWN (Oprah Winfrey Network). Mainly because I have been observing the unbelievable business mind she has and implementing some of her philosophies into my own career. But also, because I had recently caught an interview she did with Barbara Walters a few weeks prior where she mentioned that network ownership was a dream come true and a dream accomplishment even for her, a woman who amassed billions as a time slot renter on ABC for the past 25 years. I’ll take this page out of the life journey of Oprah, Bob Johnson (former owner of BET, Charlotte Bobcats, and much more), Earvin “Magic” Johnson (Magic Johnson Enterprises), Napoleon Hill (author of Think and Grow Rich), owning something has tremendous value be it financial growth or improved quality of life.

I immediately translate this thinking over to the world of real estate. Despite recent attempts of some to bad mouth the concept; owning a home is still a core component in living out an American life. Home ownership is a gift from you to yourself, so prepare yourself to qualify to own and maintain a home. Home ownership is a major part of a smart life financial plan right now and for the foreseeable future.

I am feeling more and more disagreement as I come across irrational editorial that suggests that renting housing is now a much better life choice than owning housing. It is shocking that so many are so quickly jumping on the bandwagon to bash the concept of home ownership which has been and continues to be widely viewed as a premier component of “The American Dream”. Many of these naysayers don’t specifically advocate renting but they discourage buying. Huh? If you don’t rent or buy…what exactly are your plans for obtaining shelter? Believe me the opportunity to live free and clear in someone else’s rented or owned property is very elusive! I realize that we are now a news cycle society, however, to think that two or three years of an unappreciative housing market would erase the very foundation of dreams handed down for generations (that go too far back to pinpoint) makes no sense. The idea of wealth and progress being driven by land ownership is embedded in pre American Revolution history. But, now in 2011, owning property is deemed to be a bad idea? This is irrational at best. At a minimum the financial side to real property ownership still stands up against renting. You can crunch numbers on home owning given many specific scenarios and some situations amount to appreciation and a profit, some are breakeven, and a very few result in loss (most due to the timing of a sale that could have been accelerated or postponed to avoid a loss). Even more, a family home bequeathed to children passes financial gain onto another generation. On the contrary, a rental situation has no profit or breakeven under any conditions and never qualifies as a family heirloom.

People got hooked on the notion of generating profits from their primary residence only in recent times. My parents bought their first house only thinking of eventually getting something close to what they owed on it and one day moving into a bigger home. Their main focus was to give us the shelter and space we needed as a family. They aimed to provide themselves and their children a place of their own to always call home…to create years of memories and accomplishment. They desired to own a place and to be part of a neighborhood and community. A two, three, or four bedroom home where we could select paint colors and plant a tree and flowers in the garden or install a swing set and let the dog run around the yard. A place to live that didn’t have a lease end date or an unsettling month to month arrangement.

These dreams and desires live on for my generation and the next. Every day, I meet people who are excited about putting down roots and establishing a life anchored in a home. Many, who are now all the wiser, recognize that owning a home is not an entitlement but something reserved to having made the decisions and sacrifices to build credit and other resources to be in a position to purchase. Hopeful homebuyers are more and more aware of the requirements of budgeting so they can continue to meet the obligations of their homes. Discouraging the next generation from home ownership is a disservice to them for their quality of life and for the economics that will impact them. There is housing stock that should not be left unused. There are not enough real estate investors out there to buy the housing inventory and then market it all for rental. Consequently, shortages of owner occupants often results in deterioration of neighborhoods because absent landlords and disinvested tenants are poor substitutes. I suggest to future buyers that they not pursue larger or more luxurious homes than they really need and that they be conservative in their buying. Albeit, there are some markets where prices of upscale inventory are suddenly so lowly priced that even a first time buyer may land a large single detached well appointed home that on a monthly basis costs the same as a modest row, twin, or town. Additionally, some builders and lenders are offering unbelievable 30- year fixed mortgage rates, as low as 1% and waiving mortgage insurance premiums, which could make a payment on a larger home very affordable. Particularly, banks that are hoping to unload foreclosure inventory may try any of these incentives if you agree to use them as the lender. But, where that is not the case, a row, twin, or townhome offers a conservative starter home opportunity that potentially has more affordable taxes, utility, and upkeep expenses. I continue to encourage home ownership and work to help others achieve it. While home ownership is not for all of us it is the right life style for most of us. Home ownership matters to me and it’s a reflection of who I am.

The contributing writer, Aleshia Shorter, is a Realtor ™ licensed in Pennsylvania and affiliated with Keller Williams Real Estate in Media, PA. She is also the CEO/Owner of ANS Investments and Holdings, LLC real estate investment and management firm. Please feel free to contact her at (610) 565-1995 or Aleshia@aleshiashorter.com.