Ms. Lank: You had a question in the column about staging a home for an open house, and you wrote to put small valuables away. I once saw a TV show on which the folks said that people need to lock up or relocate any prescription drugs for an open house, as there have been cases of people opening cabinets and stealing meds.
Another thing they said, which I do, is to hide any sets of extra keys. It seems that some people come to open houses and steal the keys when no one is looking. Then, they can come back later to steal. I have to admit, I had never thought of that. — D. E.
Answer: As it happens, I've long followed one piece of your advice, even though my house isn't up for sale: I keep stronger painkillers tucked away in a drawer, not in the medicine cabinet. You never know what visiting teenagers might want to experiment with.
Dear Edith: I am a CPA, and I can tell you that your reader R.W.D.'s recent statement is completely wrong. He or she wrote that paying off the mortgage is injurious because the mortgage interest allows other things to be deducted on a tax return by bringing the borrower up to the break-even point on Schedule A.
I agree with your answer. No matter how you stack deductions, you are still paying $1 for a return of 28 cents or less. You will always be on the short end of the cash stick.
The proper approach is to ask yourself: Can I earn more putting the money somewhere else besides toward the interest on the mortgage? If the answer is yes, then don't pay off the mortgage and invest the money elsewhere. This is rare for most people. If the answer is no, pay off the mortgage. It really is that simple. Anything else is simply a red herring. — G. D.
Answer: It's nice to have a tax professional back me up. Of course, your suggestion of "if the answer is no, pay off the mortgage" would come after you'd asked your clients a few other questions. It is, for example, much more productive to pay off high-interest credit card debt first. And I'm sure you'd want to know whether they had an emergency fund easily available.
But after those considerations, it indeed makes no sense to keep a mortgage just to take a tax deduction for the interest. That is except, as you say, your clients were sure they'd end up richer by investing that money elsewhere. And then they could still take a standard deduction on their income tax return.
Own or Rent
Dear Edith: That letter you received from B., the "Unhappy Homeowner," is an example of many Americans who buy into the folly and fallacy that owning a house is better than renting. This opinion is clouded by the belief that as soon as we can afford something we should have it.
Living in an apartment, duplex or rented house affords freedom and, I theorize, saves some marriages. Unseen problems and regular home maintenance inside and outside can wear people down.
Singles and couples without kids seem more likely to avoid buying, though kids raised in many rentals will often say that they enjoyed the moves. — B. W., [email protected]
Answer: From my own experience, I'd have to question that last statement. My family it bad during the Great Depression. Like many others, we sometimes doubled up with different relatives. Before I graduated high school (Penn Yan Academy, Class of '43) I'd lived at nine addresses in six different cities and villages. I did not enjoy it.
More Bedrooms or Snazzy Bath
Edith: You asked for your readers' opinions on whether a buyer would prefer four bedrooms or three with a spectacular master bath. Here's my opinion: Not many people need a four-bedroom house, but everyone wants a bath attached to their bedroom! — R. E.
Ms. Lank: I'd go for the three-bedroom home with the better master suite and closet. If someone needed four bedrooms to accommodate their children, they wouldn't buy that house anyway because one of the bedrooms was tiny. If I were the current owners, I'd make the proposed changes to please them because ultimately, their house is only functional as a three-bedroom. — J. P., [email protected]
Contact Edith Lank at www.askedith.com, at [email protected] or at 240 Hemingway Drive, Rochester NY 14620.