Why Rich Pro Athletes Should Rent Homes Instead of Buying

Bulls center Nazr Mohammed has a long list of reasons to rent—and his advice makes sense for anyone in a profession that can take them from city to city.

Photo: Dennis Rodkin
 

Chicago Bulls Center Nazr Mohammed and his wife, Mandi, last week moved from a rental house in Lake Forest to a downtown Chicago apartment. With 16 seasons in the NBA and this year’s $1.4 million contract, Mohammed could afford to buy a house, but at the moment, he’s a committed renter, as he told me when we met backstage at Windy City Live a few weeks ago.

The couple and their two children divide their time between the Chicago apartment and a house in Kentucky, where he went to school and she grew up. On Sunday, the couple’s 14th wedding anniversary, Nazr Mohammed took a break from the unpacking to talk with me about his real estate experiences. This was no lark: in our first conversation, he made it clear that he’s quite serious about real estate. Later that week, he was scheduled to talk with new Bulls rookies about financial matters including real estate.

Mohammed, who turns 36 on September 5, told me he’s learned much of it from his longtime financial manager, Billy Wilcoxson, as well as from his father, the late Alhaji Mohammed, who was a South Side cab driver and entrepreneur. Experience was his third teacher, as he explains in the lightly edited transcript below.

“We’re renting because I’ve bought houses twice, and both times I got burned. The first time I bought was in Atlanta in about 2002. I had just gotten married and gotten a new contract, and I wanted to own my first place. My financial adviser told me it wasn’t the best thing to do considering in my profession you never know how long you’re going to be in one place. But I didn’t listen.

“I bought a townhouse—3,500 square feet, three bedrooms—for under $500,000. [After I left Atlanta in 2004], it took a long time to get sold, and we eventually lost about fifty grand on it.

“[We rented when I played in New York and San Antonio, and then in 2007] when I got to Detroit as a free agent, I had just a signed a pretty nice contract and we had had two kids, so I wanted that feeling of owning something. But same situation: my financial adviser said, ‘Don’t,’ but I didn’t listen. We paid $700-something in Rochester Hills for 3,500 square feet finished and 2,000 feet of basement unfinished.

“Detroit wasn’t a good fit basketball-wise, but I started finishing the basement as soon as we moved in because I knew it would help sell the house at some point. We spent about $200,000, put a kitchen and bar down there—things we liked but that would help resale value—and we finished the basement a week after I got traded [to Charlotte].

“The bottom had fallen out of the real estate market, and that house sat empty for a few years before we sold it. We sold for a little less than the purchase price, so we lost the whole [cost of the] basement.

“I felt lucky because I still had a job. I felt bad for the people in Detroit who lost heir jobs and found out their pension was gone, and their 401K, and their house was worth half of what it used to be. Those were people going through some real turmoil; the guys I felt bad for.

“I learned my lesson. Being an athlete and not being in a position to control where you’re going to be, buying is not the smart thing to do.

“There are exceptions to that: the franchise players, the Kevin Durants, the Kobes, the Dwyane Wades. They can pretty much control where they’re moving and when they’re leaving. But for the other 90 percent of us in the NBA, renting is the best option. It’s not only in my business: a lot of people don’t stay in one city for a long time. They’re doing a lot of moves in their careers. You need places like this one [where we’re renting now] so people can have a nice home during the time [between] moves.

“I tell everyone, not just the rookies: rent. Because as an athlete, the only person making money when you’re coming and going [to new cities] is the real estate agent. The property doesn’t appreciate fast enough for you to turn over at a profit when you move to the next city. Our contracts in the NBA only last five years, and you need to be somewhere for around six or eight years just to break even with the property taxes and everything else.

“A big portion of our league comes from low-income homes, so there’s definitely the urge to buy the mansion. My father instilled in us that to have a home you’re proud of is something important. Growing up, we owned our home at 48th and Drexel. I felt blessed that we had a home, but it wasn’t a home I was proud of. It wasn’t, ‘Come in, let me show you our home.’ So there are a lot of us that buy that big house—that’s what Antoine did—and we know a lot of times it doesn’t work out.

“But I always have that urge to buy. As a father and a husband, I want to give them that stability. Kids don’t care if the home is bought or rented, it’s their home. But I still have to fight that urge. I’m home in Chicago, playing for the Bulls. Somtimes I look at realestate.com to see what I could buy. I’m at the point in my career where I’m looking at where we’re going to move when I’m done playing. I would love to live in a beautiful brownstone in the Gold Coast.

“That’s my dream now. When I was young, eight or nine years old, my dream was to make $50,000 a year and live in downtown Chicago. It seemed like I’d be filthy rich if I made $50,000. And I would live in a highrise.

“Now I’m living in a highrise downtown, so now [he laughs] I’m living that dream.”
 

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