This week has been tough. Moving is stressful. I wish I could go on vacation–that’s a picture of me paragliding in Turkey. Add to the mix that my stolen Honda coupe still has not been recovered and I’m a visually-impaired Asian driver trying to get used to driving Dean’s big ass SUV.
We’ve purged at least 20% of our possessions. Dean has been selling shit on Craiglist, dropping off at Goodwill, and handling AT&T, cable, and other vendors and contractors. I am overseeing all the logistics of being a landlord: checking employment, rental history, putting together the contract, etc. We also need to buy a washer and dryer, change our address for all of our bills, install mailboxes (the place came without mailboxes!), remedy items from the inspection report… The list is never-ending.
We are tripping over boxes, at each others’ throats. Dean works from home so I have unreal expectations that he’ll have accomplished all these household tasks as if he’s an onsite handyman. I get upset. He complains about everything he has going on. I point to my stomach, “Yeah?! Try growing a human!”
Despite the madness, life is so good. Buying this property has secured our financial future. Here’s why.
1. It’s not our dream home.
When you go looking for your dream home, you introduce irrational emotion into the equation which leads to unrealistic offers. That perfect house is one that everyone else is eyeing too, and suddenly you find yourself in the middle of a bidding war, contemplating submitting an offer waiving all of your rights as a homeowner because you simply must have it! How many people do you know who bought their dream home, then several years later they were in foreclosure or declaring bankruptcy. We bought a 2-unit property, brand new construction, adjacent to a very busy street (it’s almost like a freeway). Zero character, zero charm.
2. It made financial sense.
I ran the numbers and drummed up every single worst case scenario, and financially, buying this home made sense no matter what. Let’s say Dean and I both lost our jobs. We could easily rent out each of the units due to its highly-coveted commutable location. With the combined rental income, we could pay the mortgage, the property taxes, and use the excess to cover the rent on another apartment in the city. Hell, we could move in with my mom and dad and pocket several thousand dollars a month.
3. We did our research.
What’s it like to be a landlord? What rent should we charge for an apartment in our location? Dean and I both have experience with renting, so doing the research wasn’t hard. Test the market. Place an advertisement or post on Craigslist and see what kind of interest you get. When we posted our ad, I had HR admins from Apple and Genentech begging to get their employees into our apartment.
Is it luck or business savvy? Chance or calculated risk? I’m very optimistic about our future and so glad that we’ve laid this groundwork for the arrival of our most precious investment (the baby) coming in May!
Your turn:
What decision-making criteria did you use in buying your home?
How have your real estate investments turned out?
What is the best life decision you made that helped anchor your financial future?
Haven’t bought my own home yet, but all you listed are huge concerns of mine. Just such an overwhelming and life altering decision. Sorry for all the stress you are experiencing right now and just sending huge hugs your way.
Overwhelming time, but as always you are handling it with grace. Yes that is what rich people do, when they move they go on vacation and come home to it all taken care of. Sending you strength and humor!
The best life decision that helped secure our financial future. Paying off everything as soon as we could and putting money aside! Outside of big things like a car and/or house…never get a loan for anything. If you can buy your car straight out…do it!
Sorry to hear that you still haven’t found your car! Take care lady and don’t stress out too much! 🙂 Have a good one Catherine!!
We bought our home right before prices went up in 2001 – there were eight bids on the house and they were all over the asking price. We got it, and within a few years home prices skyrocketed. Even though they’ve come down we are still ahead of the game. We even refinanced to a 15 year mortgage so we can enter retirement mortgage free.
Hope your car turns up soon. Oh – and that is the coolest photo ever!
I think the very toughest thing is to keep your emotions in check when you are buying a (especially your first) home. Our daughter and son-in-law are going through this now and I’m so impressed with the research, planning and budgeting they have done. Just like you and Dean, they want to be sure that they will still be financially OK in any scenario. Good luck with the rest of the move! I can sure relate! It’s such a pain but worth it in the end!
I have to agree. Our home IS our dream home (at least one within our budget) and the bidding/moving process made me way too insane.
By the way, I find it hard to get past that paragliding photo. Holy cow!! How high up were you??
So we bought our townhouse at the very worst time. The realtor only had three properties to show us and at the time, the interest rate was high. We then dumped a ton of money into remodeling and honestly, I wish we’d have waited for a year to buy as we’d have gotten a regular house for the same money. Still, we’ve made it home. But I look forward to my dream home, too.
And HOLY COW to the paragliding photo! I haven’t tried that but have gone skydiving. It looks like you were way higher up though!
This is such good advice. A and I talk about this all the time: finding our dream “price” house instead of just a dream house. I love all the research and planning you are doing, I am sure it’s stressful, especially while growing a baby. Hope you are feeling well friend.
Moving is such a nightmare!!! Moving and being pregnant and a new tenant? Wow. I’m glad this turned out to be a no regrets really smart move for the two of you.
Love the paragliding pic! I’ve always wanted to do that. We also want to buy a home, but I think it will be awhile. Congrats!
Holy crap how high up were you??? From the angle and scope of the camera it looks like you’re in space, shit looks like the movie Gravity – but you look happy 😛 We’re still renting an apartment and we’re happy with this scenario. In 2 years my boyfriend and I will start thinking about housing and we’ve already scoped areas to know kinda where we want to plant out seeds.. I’m afraid of #1 because I get head over heels emotionally invested in shit and I know im going to be trying to put EXTREME expectations on ONE property which Ill have to check when time comes.. thankfully, my bf is more rational so when it boils down to it we’ll be a good team. 🙂 Be patient with the hubby it ain’t easy for him either im sure 🙂 Have fun Catherine!! -Iva
Great pic.
I know that I will always have a place to live. That is something that is important to me. A roof over my head.
Other than that no real-estate investments.
I guess the best decision was working where I work because of the defined pension that I have. If the State of California goes belly-up then we all are in deep-doo-doo. Also, I listened to somebody and started a 401k/457 about 16 years ago. He told me even if I just put as little as $50 month away and I will have a little something. I listened to him and have more than the average American has stashed away. Also, I try to buy most things with cash and pay cash on vacations and such. I don’t really like credit card debt.
I am not a financial person at all. Just a simple man who is trying.
I had a panic attack just looking at that picture. YIKES!!!
You guys were SO SMART to approach your house like this. It just makes sense. We *almost* did the “emotional buy” thing the last time we bought. We didn’t at the last minute and went with our current house and IT WAS THE BEST THING WE EVER DID. I can’t imagine how awful it would have been if we had gone through with too much house for us. Once 2008 hit, we would have been in sorry shape!! You can’t let those emotions set in…there’s too much riding on it!! –Lisa
Ps. Sorry they still haven’t found your car. Oh, that’s just terrible 🙁
I’m also curious how high that shot is – looks very cool.
Hope the home purchase works out. It sounds like you’ve made a good decision. I think I did something similar buying my place: got something that’s a home, not an “investment” or a dream. It’s completely affordable, and while I’m sure I’ll profit from it, I don’t really care what the market does. I just looked at how much I was paying in rent and tried to find something a little better.
Good luck with the move.
Igh, I HATE moving!!!
Our main criteria for our home was location (for schools) and size – not too big, and not too small… Also, I can’t imagine how much stressful you are with the move, especially while dealing with pregnancy. When I was pregnant, I just wanted to sleep all the time. Hope things get better. Just remember, “this too shall pass.”
I wish my husband and I could go back in time and make some different financial decisions. But we’re working with where we’re at now. I think you guys are very smart with the way you’ve approached things. Quite honestly, I am ready to downsize (although the kids are appalled at the idea…mostly the middle kid). Hopefully within the next 5 years or so. I’m done with the big house thing.
Wow, that photo of you is awesome! 🙂 I like your approach in buying a house coz it’s very practical and realistic. One of my dreams is to have our own house and I’m still figuring out how I can do it! LOL.
Sounds like a great move! We have talked about renting out our current home. we’ll see…
Love that photo of you!
Can’t believe the baby will be here in May!!!
It’s clear that you guys put a lot of thought and effort into making the right financial and housing decisions, and that’s a smart thing to do! So many people have not when it comes to housing!
This is a really good article Catherine. I definitely want to buy a home but feel trapped because I am unwilling to buy unless I can get more space than what I rent now. NYC has such a crazy market. Buying makes a lot more sense than renting but I don’t want to spend more on something I’m going to grow out of in 5 years. Thanks for sharing!
LOL, you make me laugh with your commentary lady! Seriously, happy for you even in the mist of the car stuff!
I think my best decision was buying a home, it has its issues but its better than paying high nyc rent.
My best criteria in buying a home is whether or not I can see myself living in it, or renting it, forever if necessary. Long term planning has always been my best financial decision.
You are a smart cookie, btw.
Love this, Catherine, and am so very proud of you guys for taking the plunge and buying a home in a very desirable area AND one that you can easily rent out, too. Definitely sounds like a very great financial decision for you both (and hearing from some who have recently lost their dream home or made some kind of boneheaded decision did kind of turn me off to buying for a while to be honest).
I actually love that you aren’t thinking of this as your Dream Home. I think that’s a mistake and one that I would like to steer clear from myself. You just NEVER know. You can outgrow a home, or find a new job and have to relocate, or maybe your needs will change in time.
Anyway, this is a very long-winded way of saying EXCELLENT post!!