The Tribune

By SIMON COOPER

Res Socius

I HAVE always regarded my home as my castle, and the place to rekindle my energy. I also enjoy pottering in the garden, and doing odd jobs around the place. I was therefore surprised to find an article on TechCrunch the other day that suggested I am wayward. I am not totally convinced, but I decided to share the theory anyway.

Reasons not to Own a Home in Business

• You have Blown Your Cash Reserve - Most people believe the safest investment is in bricks and mortar, aided and abetted by a mortgage. Moreover, when we sell our homes we reinvest the money the same way, too. Renting, and investing the down payment in your business, might just be the impetus you need.

• You Give Money Away - When you have a spare moment, try working out the costs of transfer, and the interest you pay on the outstanding balance. With the property market currently able to go in either direction, renting could be a smarter solution assuming you have the choice.

• Maintenance - Every house needs regular maintenance, and that costs money, too. Moreover, tradespeople are seldom interested in doing small jobs. Homeowners like you and I end up attending to them instead. The result is time spent away from your business.

• You cannot alter Rented Property - Businesspeople are, by definition, restless, and this translates into a desire to endlessly modify their homes. This is similar to the maintenance syndrome, except the problem's bigger.

• You're Trapped - Unless you are trading on the Internet, your house generally dictates where you do business, and that's a huge impediment to making money freely. Renting brings flexibility with it, which is another outstanding benefit.

• Buying a Home is a Bad Investment - In the current economic climate, buying a home is possibly the worst investment ever. The market's falling, you need huge leverage, you cannot get your money out easily, and there is no cash left over for investment diversification either.

• Recipe for Stress - Living with uncertainty and facing conflicting demands is a sure-fire recipe for stress. If you don't like your rented situation, you can simply give notice and move on elsewhere. With a house you could be trapped.

A Personal Opinion

My jury's divided on this one. The argument is quite compelling, given the current state of the worldwide property market. But would it wash well in more prosperous times? The main reason I'm against it personally is because a house, when finally sold to buy-down, becomes a pension.

The final clincher is that my wife would kick me out if I even suggested selling our home. I think I'll stick to domestic bliss and future equity. Meantime, my business will have to fund itself, which I'm happy to report it manages to do quite well these days.

NB: Simon Cooper is a founding partner of Res Socius, a business brokerage firm authorized by the Bahamas Investment Authority that facilitates the sale and purchase of businesses. Contact 376-1256 or visit www.ressocius.com.