How to know when you’re ready to buy a house
Don’t do what we did.
I have mixed feelings about home ownership. For one, I believe it is good to own a home, and more importantly, to own it free and clear with no mortgage. As you get older and head toward retirement, having a mortgage is the last thing you need. It’s best to have a home that is totally paid off, with the only fees due are taxes, insurance, and maintenance.
It’s great to have a place to call “home.” It’s yours. You can do with it what you want. Everybody knows, “that’s where the Grubers live.” Homeownership means you have bought a stake in the community. You’re all in.
Unfortunately, our first experience in homeownership wasn’t the greatest. Here’s why.
In 2009, things were getting cramped in the little duplex we were renting. Our second daughter was born in June of that year, and we were getting “the itch” to move up in space and to finally put down some sort of roots.
In 2010, we purchased a house. The payment was just a little more than our rent, and we knew we could “afford” it. With five percent down and an FHA loan, we were off to the races.
It felt good to not be “throwing our money away” on rent anymore. Now our money was going to an asset. Woo hoo! The house wasn’t anything special — it was a two-bedroom, one-and-a-half bath townhouse with a basement and a one-car garage. But it was ours, we had a yard for the kids to play in, and we looked at it as our starter home.
Things were just fine the first year. Oh sure, we had to replace the microwave and the dishwasher, but they were old and needed to go anyway. We put in these beautiful, hardwood floors that I loved (Amy didn’t), which I knew would help the resale value when we were ready to move on.
Our mistake was twofold. One, we shouldn’t have bought a home with other debt. We had credit cards, a van payment, and student loans. But hey, we could “afford” it. Everything was going to be OK, right? Second, we didn’t have a good emergency fund, which meant that when crisis would strike, it would end up going on the credit card.
And crisis did strike.
In early 2011, a tree root from the neighbor’s tree broke through our sewer line. In 2013, a pinhole-sized leak from the water line that went to the ice maker on the refrigerator sprung while we were gone, causing damage to the hardwood flooring. The flooring was a total loss. Of course, there was painting to be done to the exterior, because two really hot summers absolutely destroyed the paint. That led to having to replace some siding, because without a good paint job the rains that eventually came did a number on the siding leading to the front door of our home. I even replaced the storm door on the front because it sucked.
Did I mention the heavy snow? We had two winters where the snowfall was around 12 inches or more. The snow piled up outside our window, which eventually led to wood rot that needed to be replaced. Wear and tear completely destroyed the backyard and killed all the grass, so we opted to put in sod to fix it completely. The window well drain wasn’t working properly, so we had to have another drain installed. Before we sold, I ended up having to put in yet another dishwasher, because we went through many loads a day. My wife ran a preschool out of our home for several years, and all the cleaning of the plates and cups for the kiddos simply wore out the first one I put in. We put in new sliding glass doors. I replaced the flooring in the kitchen and in both bathrooms. My dad even helped me put in a new countertop in the kitchen.
Homeownership is endless maintenance.
When we sold our house the inspector commented that the house was in really great shape, and complimented us on the excellent maintenance we had done over the six years we owned the house. That was great news.
The bad news came as a final parting gift. The buyers of our house did a sewer cam inspection as part of their overall inspection. Although the house came back with high marks, the sewer cam revealed — a total surprise to us — that the sewer had broken again. The aforementioned extreme heat and extreme moisture finally contracted and expanded enough to break the line for a second time.
I’m happy for the buyers of our home, because they got something that was well-kept. But did we ever pay a price to get it there. By my estimate, there’s no way we didn’t put an additional $10,000 in the house based on estimates and repairs.
I can only wonder where we’d be today if that money went toward debt instead of a house we no longer own.
Dave Ramsey has these guidelines for buying a home, and we violated most of them. Homeownership was one of the most stressful things I’ve ever done.
There were some pros to come out of the experience. I learned a lot about home maintenance. I learned to be pretty handy with tools, and got to the point where I felt like I could fix just about anything that came up. Had I to do it over again, I think I could have replaced the sewer line by myself (but I’d really rather not).
Thankfully, for now I don’t have to think about it.
After we sold our home in 2016, we moved to a new city. We did what many people who, after becoming homeowners can’t find it in their heart to do: we went back to renting. In fact, a year and a half later, we’re still renting while we finish the last of our debt.
Because of it, I don’t have a care in the world. Our rental isn’t much. It’s a three-bedroom, one-and-a-half bath townhouse with a basement and a one-car garage. It is sufficient for our needs. When something goes wrong, I call the landlord. Coincidentally, I’ve had to call him once for a minor issue. Other than that, it’s been maintenance free.
It’s funny how that works. All the places we rented were fairly free of problems, but own a house before you’re truly ready and Murphy will take up residence.
So, how do you know when you’re ready to buy a house? If you’re in debt, don’t. If you’re out of debt, get a good down payment and have an extra emergency fund, then buy the house.
I no longer think of a home as an investment, at least not a good financial one. That doesn’t mean I don’t want to own a house again. I do, even with all the maintenance and trouble we went through, I do. I know there will be the same issues with any home you buy. It’s only a matter of time.
But when we do it the next time, we’ll have a good down payment. We’ll have a solid emergency fund in the bank. And we’ll buy something we plan on sticking in a lot longer.
Until then, we are just fine right where we are.