The first time I walked into my current home after buying it, one thought quickly crossed my mind: “What on earth have I done?”
It was 2011. My now 15-year-old son was a shade over baby age, we had a family member moving in temporarily to watch him, and we knew another child was likely to arrive at some point in the future.
We knew we needed more space.
Luckily, we’d entered the Canadian housing market just as it was hitting near-bottom in 2007–2008.
The brand-new townhouse we’d bought had added about $50,000 in value over the following few years, so we decided to roll that into our “forever home”. We just had to decide what exactly that was.
Eventually, we settled on a four-bedroom, red brick home in a leafy neighborhood that kind of reminded me of the one I grew up in.
I never wanted to live in cookie-cutter suburbia, and this was the kind of environment I could get behind. Stately-looking homes, mature trees everywhere, and an actual back yard (!).
The house itself was built in 1990, and a lot of the interior still looked like it was from that era.
Some haphazard renovations and horrific design choices undertaken by the previous owners had left it looking a bit beat up and, frankly, ugly as heck.
As I looked over the empty place and it hit me how much work needed to be done (and how much it was going to cost me) I felt ill.
What, indeed, had I done?
Rising costs, rising stress
Earlier in my life, when we lived in that townhouse as a newly married couple and then with a newborn, I had a vision of the perfect lifestyle.
Live super cheap with very little overhead and be free.
I do still love that idea.
I hate, hate, debt, and I had a vision of paying off our mortgage by the time I was in my mid-30s.
Kids have a way of changing your perspective and needs, don’t they?
Ultimately, we felt we would need more space, so why delay the inevitable while the market for larger homes was still hobbled by the crash?
At the height of the COVID market pump, our house would have sold for $150,000 over asking on the first listing day.
Back in 2010, it had sat on the market, ignored, for months. We eventually got it for $20,000 under asking.
To say the first years of owning this house were stressful for me would be an understatement.
Every time I had to spend a dime on the place — and it added up to a lot of dimes as we discovered more and more ways the previous owners had trashed the place — it was like a knife to my heart.
I also didn’t want to spend my time working on a house . I get no satisfaction from DIY projects and I really missed my townhouse where everything was new, everything looked pretty good, and everything just worked.
I deeply, deeply resented my own home.
Definitely not a good place to be, mentally.
Everyone who saw the house when we were considering it was all hyped that we should buy it . Meanwhile, I felt as though I’d been rushed into something I wasn’t ready for.
There were times when unexpected costs would pop up (or regular costs associated with home ownership that would annoy me) and I wished we could sell and just rent instead.
A change in perspective
I’m not one of those people who sees a house as an investment — it’s a place to live.
Frankly, something that costs you money and doesn’t produce any income is not an investment.
But recently I heard a line that completely changed my perspective and finally freed me to accept that buying our house, despite all its quirks and associated expenses, was the right move:
- Buying a house is a form of rent control
I like cost certainty.
I want to know what everything is going to cost me every month and that there won’t be much variance.
So when Jerome Powell signaled in 2022 that the Federal Reserve was about to start aggressively raising interest rates, my first call was to my mortgage lender.
I wanted an early renewal on a fixed rate and I wanted it now.
It cost me a bit more than a variable rate at the time, but now I still have a very low fixed rate for another year and a bit while many people who opted for dirt-cheap variables during COVID got torched by the Fed’s rate-hike cycle.
What if I hadn’t bought my home 12 years ago and tried to rent it today?
It would probably cost $5,000 per month (at least).
Now, it costs less than half of that.
While another big housing correction is already well underway in Canada, I don’t really care.
My house absorbed and held the big COVID-era price gains. But more importantly, I know my “rent” won’t be going up any time soon.
Ten years ago, my advice to my kids would have been to avoid home ownership at all costs and invest the money they would save on upkeep in income-producing assets instead.
But the peace of mind of knowing nobody is going to raise my rent or kick me out is priceless.
Do you think renting or buying a home is the smarter move?
Let me know in the comments!