The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1928-08-29
LACK OF NERVE
RESTRAINS MAN
BUILDING HOME
Reasonable Down Payments
Will Finance Erection Of
Real House
(By The Building Edito-)

Financing a home building enter
prise need halt no one who can make
a reasonable down payment and
whose prospects are such that he
expects to keep on good terms with
his landlord.
Members Of the Bismarck Demon
stration Home Association. in their
collective experience. have dealt
with hundreds Of home owners and
helped solve their problems. One of
the greatest i.andicaps which the
average individual must overcome,
they say. is lack Of nerve.
The individual living in an apart
ment or rented house does not feel
obligated to continue paying rent,
whereas the signing of a contract to
build home, together with the OBJ
legations incurred in connection with
the financing arrangements, give
many persons the idea that they are
tying themselves down.
THE thing which such persons
fail to remember" one member of
the association sal lis that they
have an invisible contract to pay
rent which will continue as long as
they have roof oNcr their heads
unless they obtain home O." their
own or become the objects Of char
ity. The necessity to pay rent. is
just as real as the necessity to make
payments on home. The renter, of
course, can change landlords and to
that extent he is not bound down,
but that, and the JOY of hunting an
other house to rent, are doubtful adj
vantages. Most persons do not care
for them, and that accounts, in large
part, for the desire for home own
ership which is almost universal"
Borrowed $4,000
In the case Of the Demonstration
home, the purpose Of which is to
prove the desirability of building a |
home in Bismarck, the owner had
$1,000 and q lot. From the Bis
marck Building and Loan Associa-
ton he borrowed $4,000 with which
to construct the house, estimated to
cost $500. On his loan he pays
$46.50 month or 1888 a year. Valu-
ing his lot at 5000 he has $500 in
vested and at six per cent the inter-
est on this surl would be SlS6. BY
adding $3.50 for depreciation and
taxes the annual outlay will be 1894,
including interest on his own money.
The man who pays $50 a month
rent pays out $72O a year. At SOS
q month it totals $3.50 a year. And
a house Of the type which Mr.. Sim
ons is building would rent for that
sum or more.
In 10 years or less Mr.. Simons
will have property worth $4,000
plus any additional value which may
result from the growth of the city.
he will have paid STA year more
than he would have paid by renting
at $50 month. The renter, who
has saved tina. STA a year. will
have l2O rent receipts and probably
the problem of where he is going to
live next. :. rapidly growing city
that is no small item and to the cost
OF renting can reasonably be adced
9zO year for moving and allie ex-
penses, not to mention the time and
trouble.
Pays On Principal
Of his total payments during his
1lrst year Mr.. Simons will have paid
Sl8o on the principal of his loan and
upon this sum he will receive a divi-
dend, since the building and loan as
ISOLATION is profit sharing ins.:tu-
ton. For 81 years the Bismarck
Building and Loan Association has
paid q dividend of 10 per cent or
more yearly. At 10 per cent MIR.
Simons' dividend on his principal
payments for the first year will b.
$3.50 SO that the increase in equity
during the first year will be s2ot CO.
In other words he gets during the
year $2O4.60 for the STA which he
paid in excess of rent at $50 a
month.
! As the plan progresses from year
to year it favors the home .owner by
much wider margin. When 81 900
OF the original loan has been paid
the dividend will amount, on the
basis Of past experience, to net less
than 5000. Last year it would have
been $24O, the association having
paid q IL per cent dividend. As the
, end Of the period of the loan in.
creases the owners equity increases
with remarkable rapidity, his div.
idends are high and he emerres
from the deal with q clear title IA
his homestead.