Well, I’ve done it. I’ve gone off and become a real grown-ass person. I’ve bought a house.
I remember when I first started renting, I had all these grand ideas about how – well – renting was going to be so much cheaper than home ownership could possibly be, so clearly I’d have lots of flexibility to do all these wonderful and amazing things. Why would I want to be tied down with a house, when I could be all cool and commitment-free in my apartment?
Then, you know what happened? I didn’t wind up having heaps of money to live just exactly how I wanted, and there were still all kinds of annoying adult-y things I had to worry about in my apartment, and how come I’m giving some other chump all my frigging money with no end in sight?
So, a few years ago, a number of people (my folks included) suggested that I consider moving back home so that I could save enough coin to buy a house and stop renting. I came to the realization that, for me, owning was actually going to make more sense; so that’s what I did.
Now that I am a couple of weeks away from actually getting the keys, at last, I thought that I would do what I like to do when I’m embarking on something new, I’m gonna blog about it. In the coming weeks and months, I plan on blogging about the whole home-buying process, from decision through to purchase, and then hopefully will continue writing about my adventures in home ownership.
Livin’ the dream.
First thing’s first, though, and that is you’ve gotta make the decision to jump in. There are a few things I considered, and I recommend you think about these things too.
Where do I see myself in five years?
Ask yourself about your intentions for the next five years – are they pretty stable, or is there a lot of uncertainty about where you’ll be? Maybe you don’t have it all figured out, but this is really a straightforward question about geography. Think you’re still going to live in the same city in the next five years? Or are you someone who moves around a lot?
If you’re likely to stay put, home ownership might be something that makes sense for you. If you’re likely to move, then maybe now isn’t the right time to buy, even if it is something you want to do. Real estate transactions cost a lot of money, they are very time consuming, and can be emotionally draining, so for most people we’re going to try to limit the number of those transactions.
What do I want?
Home ownership is time consuming, or so I’m told. I’ll soon find out. But I know that as much as there were adult-y pain-in-the-arse things about renting, all those things that you don’t have to do in your apartment become yours to do in your home; unless of course you go the condo route, in which case only many of the pain-in-the-arse things become yours to do.
On the other hand, maybe you’re someone who wants a big ol’ garden in your yard, or maybe you want to renovate a place and make it really ‘yours.’ When you own a property, you can pretty much do with it as you please. As a tenant, you’ll find yourself very limited. Take some time to think about what it is that you’ll be giving up, and weigh those things against the things that you’ll be gaining.
But seriously though, what’s my money situation?
Reality check. Even if all things were equal – let’s say your monthly living expenses in a rental property were exactly the same as your monthly living expenses as a homeowner – there’s still the small matter of a downpayment.
The average home price in Ottawa is somewhere around $400,000 now. Consider as well that if you’re putting anything less than 20% down on your home, you’re going to have to pay for CMHC Insurance. Then you’ll have to close the deal, which involves all kinds of not-insignificant expenses, like land transfer tax, a home inspection, legal fees and other disbursements just to name a few. The cost of the transaction can be anywhere from 1.5-4% of the price of the home. And even once you figure out how to cross these hurdles, chances are your house is going to be more expensive than your rental; don’t assume that your rent will translate into a mortgage payment, because you’ll probably be paying for more utilities than you do in a rental, generally over a greater square footage, not to mention the costs associated with maintaining the house and of course your property taxes. Are you really going to be able to come up with that kinda scratch every single month for the next 25 years, while also allowing yourself such luxuries as, oh, I dunno, eating food?
What about me? Well, first, I see myself living in Ottawa for the foreseeable future. Much as I had wanted to move to Toronto in my early 20s, it just didn’t work out that way and by the time my mid-to-late 20s rolled around it wasn’t something I wanted so badly. I feel pretty settled in Ottawa, and the city – which, for the record, I’ve now lived in for over 20 years – has really grown on me in a way it hadn’t when I had just finished university (whoa, ten years ago). So that was my first checkmark in my “not crazy to consider home ownership” column.
Then I thought about what I wanted. Turns out, it was the stability and security of home ownership. Sure, it is going to be more expensive than renting, but the place will be mine; and, more importantly, not every penny that I spend on putting a roof over my head is going to go into someone else’s pockets. Some of it is going to be building equity and putting me in a better position in terms of long-term financial stability. When I first started thinking about buying, I wasn’t saving a penny – I was renting, and living paycheque to paycheque. Even if my income didn’t change, and if I assumed I’d have some way to get a downpayment together, once I was in, some of the money would be staying with me in terms of equity in my home. I wanted to do something smart for my future.
Finally, shit got real. Fact was, I had no money to buy a house. Fortunately, my parents were encouraging me to move back home so that I could save, a position I’m very fortunate to have been in. So, I said so-long to my beloved apartment – in it’s cool spot, in a great building with neat amenities, and from which I could walk to work – and I said hello to the ‘burbs, started spending lots of time in my car, and began squirrelling away every cent I could. That was in April of 2013, and just over two years later I bought my very first place.
Stay tuned, and I’ll tell you a little more about it.