Banking On The Home Dividend

Is it worth it to own a home these days? According to authors Gary and Margaret Smith, the answer is yes. Their book, “Houseonomics: Why Owning A Home Is Still A Great Investment”, dispenses advice for anyone considering the purchase of a home.

According to the LA Times book review, “Houseonomics” authors tell readers that home ownership is a great investment because of the home dividends earned. The Smiths, educated in economics from Yale (Gary) and Harvard (Margaret), explain that house dividends are the amount of money homeowners save by putting money towards their home versus rent.

Here’s a snippet from the review.

In fact, they contend that for most people in most places, now is a good time to own a home. In some areas of the country — such as Indianapolis, Atlanta and New Orleans — homes can even provide double-digit after-tax returns.

How can this be? Gary Smith and Margaret Smith, who hold doctorate degrees in economics from Yale and business economics from Harvard, respectively, said the home dividend was the amount homeowners saved by investing in their own homes instead of renting. This dividend is calculated by determining the market rent for the same type of home, subtracting costs for mortgage payments, property taxes, insurance and maintenance or homeowners association fees, and then adding in any tax savings.

What do you think? Is home ownership worth your while and why or why not?

And now, let’s take a look at some deals south of the Boulevard in Woodland Hills.

4731 Cerrillos Dr./5bd, 4bth/$219 per sq. ft./3,192 sq. ft./699,000

4953 Medina Dr./4bd,3th/$227 per sq. ft./3,406 sq. ft./$774,777

21420 Marchena St./4bd,4bth/$228 per sq. ft./3,130 sq. ft./$715,000