Q: We'll be moving out of our house in November and leaving this area. We paid $65,000 for our house two years ago and our present mortgage balance is approximately $47,000. We can't buy another house for a year because we'll be moving again in November 1979. Would we be better off keeping our $18,000 invested in this house or put it in a savings account in a bank or do something else with it, for the next year?
A: There's no single, authoritative answer to your question. Do you want maximum security with relatively low current return and no capital appreciation? Do you want maximum current return and capital appreciation with high risk? Do you want reasonable current return and capital appreciation with reasonable risk? Maximum security is probably represented by bank certificates of deposits or the relatively new savings and loans "T-bill certificates," or Treasury bills or other similar government obligations. But you lose all chance for capital appreciation, even enough to keep up with the inflation in our economy. Carefully chosen shares of corporate stocks may give you a reasonable current return and reasonable capital appreciation. But there's no assurance of this, based on past and present stock market actions.
If your house is well-located and you can secure reliable tenents, you should be able to get a current return that isn't unreasonably low, plus equity built-up, plus tax-deductible depreciation, plus capital appreciation that equals or exceeds inflation over the next year.
Earl A. Snyder, a realtor, appraiser and attorney who specializes in investment real estate appraising and counseling, answers questions only in this column. His address: 14909 Kalmia Dr., Laurel, Md. 20810