As the daughter of a former real estate agent/now turned title processor, my mom basically raised my sisters and me on HGTV. This factor, paired with my Type A personality, made my decision to buy a house a long time coming.
I wanted to buy a few years before, but I instead invested a lot of my savings and also spent about $10,000 out-of-pocket into going back to school for nonprofit management. So when I was able to accumulate more earnings… again, buying a house was at the forefront of my mind.
But wait – Aren’t millennials killing the housing market? Just like we are killing napkins, cable, and beer that tastes like water? All we really care about is spending our cash on Starbucks and avocado toast. How could I afford such an endeavor?
I do agree that people my age wait longer to get married, have families, and buy houses. But I don’t believe we are killing anything, and rather are evolving with the needs of ourselves, the environment, and the economy. It’s understandable that people my age would not want to commit to the responsibility of home ownership yet.
As for me though, there were several reasons I chose this route. These vary from strategic financial planning, to being perpetually stressed out when renting, to providing myself some cohesion.
So while this decision might not be for everyone, I am here to prove that yes, you can eat your avocado toast and still be a millennial home-owner (if you want to be). Here is why I chose to buy:
1. I can have as many cats as I want and no one can tell me otherwise.
And I don’t have to put down any pet deposit either!
Being that I am a real-life Snow White, I seem to accumulate stray animals at a higher than average rate. While living at my current apartment I accrued an additional two cats, one of whom just waltzed through my doors one day (Earl) and the other found by my dad at a junkyard (Houdini). Both of these sweet babies are the most handsome boys in all the land… And also had to be held in secret at my apartment. I couldn’t bear the thought of my landlord saying no to them.
But now that I own a house, I can let my dreams come true and eventually adopt a small army of pets.
2. I was getting sick of relying on my landlord.
At my first apartment, I was spending a (reasonable) $800 a month for a two-bedroom apartment. However, that place was garbage and even my 21-year-old self knew I was being ripped-off. Carpet throughout, appliances from the 70’s, a leaky toilet, a subsequent moldy wall, and creepy/incompetent handymen made this place an embarrassment to invite my friends over to.
Once my lease ended, I frolicked out the door and ended up in an $800 a month duplex. I’d thought I had hit the jackpot – I had a fenced in yard, hardwood floors, a non-coin operated washer and dryer, and it was all for the same price!
It was all super good and dandy… Until everything started breaking and my landlord went AWOL.
After the person living above me moved out, the place remained vacant until a squirrel moved in. He has been digging through the floor ever since – and potentially creating a family up there. Water began seeping through the ceiling after this. My once-coveted fenced yard began to rot away and planks with nails sticking out littered my yard. The sink broke. The toilet broke. The dryer broke.
Because my landlord never responded to any of my requests to fix anything, we haphazardly tried to fix things as best we could without investing any serious money into it. It wasn’t our responsibility to fix!
But, even with my former living situation being in slight disrepair, we still felt we were getting a bargain. Surrounding apartments went for over a grand – which I tried to remind myself of every time I washed my face in the kitchen sink (since the bathroom sink was broken). Plus, the threat of moving somewhere else, only to have a new, inattentive landlord was an exhausting thought.
So imagine my surprise when I found out…
3. My monthly payment is less than when I was paying rent.
When I first began the home buying process, I would use online mortgage calculators to help estimate what my all-in-one cost would be. Most were a smidge over $800, which was a heckofalot cheaper than most rental homes of the same size.
With the house I ended up choosing, at first my negotiations were putting me at just over $800 with insurance and taxes included. I was totally pleased with that number.
However, as the negotiations continued, I ended up buying the house “as-is”. With that, the price of the home significantly decreased and so did my monthly payment… To less than what I was paying for rent!
Which will be great once I am done investing a billion dollars into fixing literally every part of this home.
4. Because I chose a fixer upper, I also got the home for a really reasonable price.
In addition to my mortgage payments being less than my rent, I was also able to purchase my home for a fair amount.
We are located centrally in St. Louis and are right next to a main highway, which was important to David and me as we work in completely opposite directions. Additionally, the neighborhood is stellar, and we are able to walk to a handful of great restaurants, grocery stores, and even a community swimming pool. We are also located less than a mile away from the elementary, middle and high school.
The home itself has a lot going for it – two bedrooms, a huge backyard, and, the real seller for me: a sunroom.
It did/does have its issues though, including the scent of smoke sticking to every surface, a once-upon-a-time termite problem, and a tree-gone rogue – whose roots grew right through the front porch and into the basement. The home required it be treated for termites, have the tree removed, and have a total facelift on the inside. A new floor, new paint, new fixtures, some new drywall, and a very thorough scrubbing were all desperately needed. And that has required a lot of money up front.
But, to be honest, my heart was leaning towards buying a home that needed some work anyway. Because…
5. I’ve always wanted to learn to renovate.
“But Jenn – didn’t you just talk about how living in disarray at your last apartment was stressful? Why buy “as-is”?”
Well yeah – but now that I am my own landlord, I can fix whatever the heck I wanna! And I don’t have to rely on anyone else to do it for me.
There are so many skills in life that I feel are valuable, and knowing how to be house-handy is one of them. People like to throw around the cliché that buying a home is a money pit – and it can be. However, a lot of those expenses can be mitigated by attempting to remedy the problem on your own. Which is why I want to learn!
I’ve only just begun renovating, and it is a stressful, slow, and painful process. But – it’s also exciting, fun, and satisfying. I’d recommend it to anyone, whether to save money, learn something new, and/or to have the opportunity to make the property your own.
6. I was able to save because I’ve got friends in the biz.
I cannot emphasize enough how fortunate and grateful I am to have a mom who not only works in housing but who also somehow knows literally everyone in Missouri.
This is where I strongly encourage anyone who is buying a new home to go with an agent you trust. My real estate agent was a friend of my stepdad’s, and she made sure to take care of me. Even when I was freaking out about the possibility of losing the home to my low bid, she advised me to stay firm. Her ability to somehow stop me from throwing all my money at the house, while simultaneously being an unforgiving and fierce negotiator with the seller, saved me significantly.
Additionally, my mortgage officer was a friend of my mom’s and she too helped me out. While my interest rate was a product of my credit, she advised me on whether or not to pay additional to extend the rate. She also scoured my closing contracts to find every option where I could save.
Now that I am in the midst of renovating, my mom and stepdad’s connections to handypeople are benefitting me as well. My stepdad himself is a contracted painter, and he has friendships with plumbers, electricians, and carpenters. All of whom I need, since basically everything in the house is broken.
I guess all of this is to say – thanks, mom and Mark!
7. Interest rates were low and still are… For now.
One of the biggest pushes for me in getting a home so quickly was the potential for interest rates to rise. They already have been and, because the economy continues to do well, they likely will rise more. And even with a stellar credit rating, if the interest rates rise then that means you’re paying more on your mortgage.
While I am an incredibly indecisive individual, I am also supremely cheap. I have always wanted to buy a house, and I was in a position where it was possible financially for me. However, I was a little up in the air about it – until I thought more about the interest rates.
If I had let my indecisiveness reign, waited a year to buy, suffered another lease in a crappy apartment, and then bought a house – only to find out my interest rate was higher than had I originally bought when I was thinking about it – I probably would have died.
Even a small increase equates to a lot of dough in the grand 30-year-mortgage scheme. The numbers did the talking, and I was sold (get it? That’s a pun.) on the idea of buying.
8. The money I am putting in is a payment towards myself.
Besides, ya know, the interest I was just talking about… And insurance. And stuff.
When paying rent, I’d sometimes cringe knowing how much money I’d paid to my landlord. Over the 3 years I stayed at my apartment, I paid my landlord nearly $30,000 for living accommodations. Almost $40,000 if you include my prior apartment complex. And that was just rent and doesn’t include insurance and utilities.
I understand you gotta pay to stay. But, it began to seem silly to me that, in Missouri’s housing market, you could also live somewhere and pay into yourself.
9. I needed some stability.
As I mention often on this blog, I am diagnosed with anxiety and OCD. Sometimes it’s funny to talk about and sometimes it wants to ruin my life.
While change and spontaneous decisions don’t necessarily scare me, not having stability does. Obviously, otherwise I’d be way less obsessed with saving money.
There are various aspects of my life that move around and shift and are out of my control. I wish I could go with the flow and accept that life fluctuations are inevitable, but I am just too high-strung. I try to control everything that might affect me and go bonkers when I can’t.
One perpetual freak out I recurrently had was over my living situation. When my upstairs neighbor moved out, I basically begged me landlord to house a friend over a stranger. He chose the squirrel instead, I guess. When he went MIA, I sent text after email after text, Facebook stalked, and as a last resort sent certified mail. Nothing worked, and I still have no idea what is going on. And as mentioned above, just the notion of moving out and finding another shitty landlord in another shitty apartment was enough to convince me to want to live in my car.
And that’s not including the greater worries. I also fear(ed) things way above and beyond my control, including market crashes, apartment shortages, moving back in with my mom, interest rate explosions, etc.
The idea of owning a house (that I can afford and is within my means) comforted me. There are now no more concerns that my rental unit is in foreclosure and my landlord has fled the country. I don’t have to worry about my rent going up or my lease not being renewed. There will be no more thinking about moving trucks again for a long, long while. And, if/when David and I ever wanted to move, we can rent out the property and make a tiny bit of supplementary income. If we were ever in a pickle, we could just move back.
I realize, of course, that there are a set of new concerns brought about by owning a home. But shhhhhhhhhhhhhhhhhhhh. The stability of owning make it seem worth those worries, at least right now.
10. I watched too much HGTV.
Joanna Gaines came to me in a dream and asked: “Are you ready to meet your Fixer Upper?” And I woke up in a cold sweat, and immediately put a bid on the house.
Haha, just kidding… Sort of.