Do you own a house? We used to before we moved. Now we are renting and personally, I think it’s the best thing ever! Well, at least for now. So whether you are renting or you own your home, follow along and see where I’m going with this. It should give you a perspective as to how you need to handle your own housing situation.
I’m a deadbeat.
At least according to my wife.
No biggie though, I’m not offended, because she says that she’s a deadbeat too.
Why does she say such things? Because we no longer own a home. We’re renters. We live in a house that someone else owns and we pay into their equity. My wife is 100% correct~ish.
I think differently.
I think that I’m a genius, which is quite a stretch coming from a self-proclaimed Financial Moron.
When I took the job in California, we naturally had to move out of the house we owned in Arizona. The 1,000 mile round trip commute everyday was going to kill me. We had built that house ourselves, with me as the General Contractor, 15 years earlier.
It was our first house that we owned. We had been renters for so many years that we had been together. It was a big step for us. One that we had been scared to take for so long, though I’m not sure why. When we were building it, my wife was pregnant with our daughter, our first child. She was a fertility baby as getting pregnant was more difficult for us than most. So with the pregnancy, and all at the same time finally being homeowners in a house that we designed and built, there was some obvious emotional ties to the new casa (that means “house” in some other language).
With a new home comes new problems.
Whether you bought your home from someone who lived in it for years or if you are the first ones to live in it, regardless of who built it, there are always the new house issues. Things that just go wrong that you didn’t plan for, but always cost you money. It might be minor money, but after laying out big bucks to buy a house, any unexpected funding hurts.
At some point, the bleeding stops.
As you get through those issues you get to the phase where things sort of level out a bit, repair-wise. That’s when you decide that you want to make some changes. Maybe remodel the kitchen or just paint a room. You might add a shed in the yard to house all of those things that you don’t know where they go but you refuse to part with. Either way, you are spending money and time doing work to your house.
Just when you thought you had it all figured out.
Then comes the fun part, the repair phase. You know that air conditioning unit that has worked flawlessly right up until the hottest day of the year? Yeah, that’s the one. The one that will cost you well into the four digits to replace or repair and the service tech is booked solid for another week just to look at it. That’s ok though, because it will give you time to fix that leaky faucet or replace the water heater. There’s always my favorite, “Honey, why won’t the garage door go up?”
Ugh…..
You can’t ever really keep track of that money. I mean you could, if you started right from the beginning with writing it down. Though, I can’t see it as being a fun thing, as in something to rejoice over. It’s not like you are going to gather the family around the Festivus Pole and celebrate all of the home ownership expenses that you laid out over the last twelve months. In fact, you are better off NOT knowing exactly how much money you spent maintaining your home. After all, that is part of home ownership, right?
This is where I start thinking that I’m a genius.
Trying to move the whole family to another state all while the kids are finishing school, after-school activities, sports, and while my wife is still working, cleaning and packing, and arranging work to be done on the house in preparation of selling it, is difficult at best. Compound this with trying to buy a house in the new state with your wife INSISTING that she gets to see it before any decision is made.
The housing market in California is as such that when a house goes on the market, they typically have an open house the first weekend. During which, they usually get multiple offers, sometimes in excess of their asking price. How could I possibly compete with that when half my sales team is 500 miles away and very busy? I couldn’t, so I went to plan B (not the birth control). I decided that we were going to rent a house.
The frutration is real…
House rental in California isn’t much easier than house purchasing. The competition is immense and the better the deal, the faster it was snatched up by the “other guy”. After a month and a half of trying to buy a house, I then only had about three weeks to try and rent a house before I was scheduled to go back to Arizona to pick-up the family and all the belongings and move them out. Things were not going well. I was getting beat out of every house I looked at.
I was frantic.
One afternoon I sat on the bed disgusted. I had just found out that the house I was excited about getting into was rented 8 hours before I even went to see it. Out of frustration, I opened up Zillow, hesitantly. The first house I see was perfect (not really), it was big, it had a yard, a three car garage, and a pool. The rent was more than reasonable for the size and cleanliness of the house, oh joy. I looked down the ad and saw that it had been listed a mere 6 minutes earlier. So right away I “sent the owner a message” on the app. Then I looked at the pictures and figured that I had better call instead.
I was the first caller.
Seven minutes after she listed the house, I was the first caller. While on the phone with her, her line started blowing up with people trying to call in. Long story short, yada, yada, yada, she honored me being first during the walk-thru and offered me the house. ONE DAY before I was flying back to Arizona to get the family.
I know you’re waiting for the genius explanation. Patience grasshopper.
The mere cost of this move was prohibitive. Upgrading the house to make it more sell-able and packing and trucking our belongings was a major expense. The job I was offered did not come with a paid move. The complete relocation was on my dime. That dime, by the way, was all of the money that I could muster up for a down payment on a new house. It was a “petite” little amount, but it would barely suffice, if I didn’t have the moving expenses. Yada, yada, yada, we’re out of money.
Being deadbeats turns out to be a blessing in disguise.
You see, in a time when money is tight and you’re trying to play catch-up with your finances, and maybe starting that grossly overdue budget, renting a house is much better than buying one. Yes, I am paying into the equity of someone else’s house, but it is at a fixed, and VERY budget-able, amount. It’s great because I don’t have to worry about paying to fix anything, it’s not my house. I make a phone call and whatever it is, gets fixed for me. No need to worry about spending money to paint a room or remodel the kitchen. It’s not my house. It doesn’t matter if the taxes go up, again, not my house.
The genius part:
WHEN IT COMES TO HOUSING, RENT IS THE MOST YOU WILL PAY FOR IT. A MORTGAGE IS THE LEAST YOU WILL PAY FOR IT.
In a situation like ours, where we are trying to get a grip on our spending and finances in general, renting plays a major key role. Because I know EXACTLY what the cost of my housing will be, I can even budget in SAVINGS. Upon the sale of my house, after expenses, we had just over $27,000. Divide that by the 15 years that we were there and that is a mere $1.800 per year into “savings”. Or roughly the equivalent of saving $150 a month, Yay. Currently, I have budgeted in $400 per month into a savings account. More than double what we were doing with owning our own home and counting on the “magic equity”. and it’s far more guaranteed than the equity of any house.
No matter how many times I explain this to my wife, she still doesn’t like it. Her reasons for not liking the rental thing are a subject for another post, so I’ll just tag that little gem right HERE. However, suffice it to say that she doesn’t get to change the things that she doesn’t like about the rental house. Which, of course, would cost me money.
Now are you beginning to see the genius in plan B?
Dave
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