Taking the Plunge

Photos
Taking the Plunge
How a lucky real estate dabbler became an overseas landlord.

Still, we were in our thirties before we thought to acquire a house of our own, much less any spares. As grad students and young workers who had never bought anything more expensive than a used Honda, stretching our bankroll to purchase something with so many zeros on the price tag seemed like the physics of another dimension.

That's when we discovered that an entire industry exists to smooth over those little hindrances to buying a house -- like not being able to afford one. One-hundred percent financing; FHA guarantees; 80/20 split notes to avoid mortgage insurance --this is the necromancy that Realtors, brokers and title attorneys conjure in service of your American Dream -- and their percentage. They waved their fountain pens, dumbfounded us with rune-covered documents and finally handed us the keys to a 1939 Cape Cod in Takoma Park that they said we could keep.

Cool. I loved owning my own toilets -- and the house they came in. After a lifetime in apartments, it was immensely satisfying to know I could take a sledgehammer to a wall and no one, except Ann, could object. I relished the chores and didn't hesitate to take apart a busted dryer or dismantle a dripping faucet. "Now if you could just put them back together again," Ann would say. So I learned how to do that, too. Together, we laid our own floor tile, upgraded our own wiring and generally were the do-it-yourself masters of our 1,200-square-foot domain. We were good at home-owning.

It was a few years later that we had our first baby and -- given a baby's constant need for food, diapers and college educations -- that the phrase "financial planning" seemed relevant for the first time. It's not surprising that we thought of buying another house. We'd once had a neighbor with two houses, one he lived in with his family and another left over from his bachelor days that he rented to college students. When he was transferred to Bellingham, Wash., he sold them both and headed west with an impressive grubstake. It was a powerful object lesson.

Surprisingly, our most venture-savvy friend, a partner in a major accounting firm, tried to dissuade us. He didn't think much of single-family rental houses as investment vehicles. "The P.I.T.A. factor is too high," he said. (That's accountant talk for pain-in-the-asset column.) "Landlording is work. You never have to fix a dripping faucet on a stock certificate."

Pshaw. We weren't scared of any dripping faucets. And I understood more about plumbing than I did about NASDAQ. So back we ventured into the For Sale wilds.

This was 1998. Compared with the ferocious real estate market of today, it might as well have been an episode of "Father Knows Best." There were plenty of houses in Takoma Park and Silver Spring in the mid-$100,000 range; buyers mulled their options for weeks and often bid below the asking price; I wore a snappy fedora, and we drove to open houses in a 1958 Packard. It was another age.

Two incredibly lucky breaks sealed our interest in real estate investing: We got into it just before the recent astonishing jump in home values, and our first rental property turned out to be a total cream puff. It was a little brick cottage on a big wooded lot in Takoma Park, recently restored, full of charm, 3 br, 2 ba, wlk to Mtro . . . Oops, sorry. Force of habit.

Beth Truman, our Realtor, had actually been our first landlord in Takoma Park. She gave us invaluable advice about moving to the other side of the lease. Most of it boiled down to valuing the tenants: Fix things quickly; be flexible in the terms of the lease; don't jack up the rent every year.

"It's worth hanging on to good tenants," she said. "You can lose a lot a money by having the house go vacant for even a month or two."

We ran an ad for an open house one Saturday and had more than 20 people show up, all of them ready to sign a lease on the spot. We took a stack of applications, ran credit checks and gave the place to the first person who had applied -- a single female professor at Gallaudet University. I think I was more excited than she was on moving day. I wanted to hang out to see how her stuff fit into our house, but Ann told me I had to let go. They were the tenant's toilets now.

But I was on call.