Is Your Home Shutting Down Your Savings?
Posted by Gail | Filed under Balance, Home Buying, Saving
There’s a lot of blah blah blah about how many people are at risk because even a small increase in interest rates will create havoc in their budgets and their lives. (I’ll bet most of those people don’t have budgets, so I’m using the term metaphorically here.) What often not talk about is how often people shoe-horn themselves into a home, which eats up all their money leaving virtually nothing for long-term savings.
“But Gail, my home IS my retirement plan.”
Have you not been listening? If your whole retirement savings is wrapped up in your home, you’re assuming your home will continue to appreciate (there won’t ever be a down to the UP we’ve been on for so long), and that it’ll be worth a lot more just when you’re ready to sell to make some food money.
And what about your other savings: education savings for the kids, your emergency fund, that curveball account you need for the stuff that pops up out of the blue.
And what about your planned spending: the kids’ hockey fees, the car you’re going to have to replace in two years, or the roof that lost some shingles in the last wind storm.
Squeezing your budget tighter than a frog’s ass to wedge your way into a home you can barely afford is short-sighted and – well, let’s be frank – STUPID! I don’t care how low interest rates are now, how afraid you are of missing out on the real estate market or how often your mother tells you rent is “throwing money down the drain.” Strapping yourself so tight that you can’t take care of the other aspects of your financial life – really, you can afford the $350 it’ll take to make a Will? – means you’re too focused on one goal and you’ve lost sight of the big picture.
And then there are the IDIOTS who not only buy too much home, but go into debt to keep it by using their credit cards and lines of credit to supplement their incomes. Lord love a duck! If buying a home means you’re going to carry a balance on your line or on your credit cards, how can you ever hope to come out even.
If you added the cost of the interest on your consumer debt into your “shelter,” you’d get a more realistic picture of just how much of your money your home is eating.
April 23, 2012 at 8:04 am
Unfortunately it seems like there will always be those who are trying to impress people with money they don’t have. It’s going to be very interesting to see what happens to those people when interest rates go up.
April 23, 2012 at 8:26 am
Great message Gail, but unfortunately, it falls on deaf ears of those that think they “need” a huge house to start out in, and have to have it decorated “just so”. It seems so often that people want what they think others would want, not what they themselves need. I hate the “keeping up with the Jones” stuff.
April 23, 2012 at 8:34 am
If you have to use credit cards or a LOC to live day to day you should not be buying such an expensive house. Maybe you should be renting – there’s nothing wrong with that. If your mortgage is so high that you don’t have necessary savings in place in other areas it’s a disaster waitng to happen.
I think a big problem, besides some people’s sense of entitlement or the need to keep up with others, is that the fact that people are misled by the preapproved mortgage amounts the banks offer. Just because the bank okays a certain amount doesn’t mean you should max out that limit. There’s probably a lot more enjoyment and less stress in a small house than there is in a big, fancy house with a lot of fancy upgrades.
April 23, 2012 at 8:35 am
I’ll always remember my first home fondly. It wasn’t the smartest purchase and, in hindsight, it was too much mortgage for me, but I felt so proud, that I’d finally arrived in the adult world after so many years of student-living. But I got over those emotions in short order and now I view my current home more realistically.
Luckily, I’ve had enough income over the years to buy rental property. It’s been a great experience and I see the value of renting when appropriate. Many of my tenants have been homeowners in the past, but their needs are simplified now. And one tenant couldn’t be happier; he’s relieved to be liberated from the costs and duties of maintaining a home and he’s freed his energies to places that add value to his life instead. And the tenants have built friendships and support each other. You can’t place a dollar value on that!
April 23, 2012 at 8:56 am
Thank you. Thank you. I become exhausted trying to teach customers/clients this. Just because the almighty bank throws you a HUGE long line of zeros to be pre approved for DOES NOT A PRE APPROVAL TO LIVE WITH MAKE! I cringe, I yap, I beckon….still it’s “but I want THIS , I need GRANITE, I need NEW!”. I am a Realtor, and my own home is a simple townhome, we just locked in purely because, well, we could at a great rate and maintain our low payments….I will never ever understand it. And it’s my business to understand it and I still don’t. I will challenge you that renting is not best unless it is a necessity for you.
April 23, 2012 at 8:58 am
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April 23, 2012 at 9:12 am
Great message Gail. Unfortunately, many people still believe that the interest rates will remain low and therefore they will believe this until the inevitable happens. My spouse and I took a home that was way below what we qualified for and with all expenses and upkeep, we are glad we decided not to borrow at our capacity as we do not understand how other people can live like this.
I believe once the prime rate starts creeping up we will see many homes on the market.
April 23, 2012 at 9:28 am
There isn’t necessarily a straight-line connection between interest rates and home prices decreasing. The US has the lowest 30 year interest rates in history and home prices there keep dropping.
April 23, 2012 at 9:32 am
When we moved from a larger house and yard to the much smaller place where we live and work now, all my Canadian friends and family said ‘oooh but it’s tiny, you’ll be bumping into each other all the time. Why not stay in this town, buy a BIGGER place and commute?’ My European husband said ‘the new place is still bit big for us, don’t you think?’
SUCH a difference in thinking.
A proper sized house for alot of people I know is have a dining room and formal living room that are used 6 times/year. I know this because we walk by these rooms on the way to the kitchen or family room which is always much cosier and welcoming. My husband thinks the 500 square foot spare basement bedroom is what makes this place too big for our needs for most of the year.
Me, I’m happy not commuting, love living in the town I work in and a much more affordable house. The only time I’m reeeaaallly envious of my friends is when there’s company coming and thar’s cleanin’ to be done, Mah!..no guest bath here that’s tidy, no living room that doesn’t show the day to day wear of dogs and snack and half finished puzzles–really living in it.
April 23, 2012 at 9:56 am
We had a mcmansion, then we had a divorce. My girls have lived in both the big and the small. They LOVE this small house. Maybe because it reflects us, and not their dad (they love their dad, but he has a very different style from the girls).
I also don’t miss the people who needed to judge us because we owned a big house.
April 23, 2012 at 10:20 am
I have just been reading the Wall Street Journal Guide to Homeownership, and he makes a really excellent point that you should just think about your house as a very very big PURCHASE not as an investment, because the investment part is not guaranteed. So if you just think about it as a purchase, you will (hopefully) think more about what you can afford, and diversifying your portfolio beyond your house, and deciding what you want and what you can give up. There’s a lot of the book I found to be not applicable to my situation, or just plain old negative, but that idea is a good one, and I think I’ll hold onto it, in addition to the great reminder in this post.
April 23, 2012 at 10:21 am
We dropped the housing goal. As desirable as it is, we also wanted to save for our kid’s education and do other things. We are concerned that one of us may lose a job (it has happened in the past), so it is important to us that we can operate on one income as an emergency measure.
We currently rent for $950 a month and a comparable condo in this neighborhood (which we love) would cost us $300,000-340,000 in this area PLUS $300-400 in monthly condo fees PLUS $133 in taxes monthly. People who say renting is throwing you money away obvious have not done the math in this current environment.
April 23, 2012 at 10:23 am
My parents bought their first house in 1967 – my mom asked her boss, a lawyer, what they should do regarding their mortgage. He strongly suggested that they get the biggest mortgage they qualified for, and then use part of it to buy new furniture and appliances.
Instead, they got the smallest mortgage they could, and moved from their mobile home into the house – their only furniture was a bed, 2 folding lawn chairs and a stereo. Each payday, they used one of their paycheques to buy something they needed – a fridge, a stove, a couch. They bought a bedroom set (2 dressers, 2 nighttables, headboard) at Woodward’s for $16 – it wasn’t fancy, but it would be “good enough” until they could afford better. (they replaced it in…2005 I think )
That was only their first house – I grew up in 3 houses – and the last 2 were purchased with cash. From the time I can remember, we never had a mortgage.
My mom, when she was close to retiring, appreciated the fact that her living costs were the property taxes and utilities – but she also mentioned more than once, that you “can’t reach into the wall and pull out money for groceries” – houses are great, especially if you pay them off – but you need additional savings to live off of.
April 23, 2012 at 10:24 am
My husband and I bought our first home 18 years ago this July. 2 of our 3 sons have since moved out. Over the years I have heard the same thing from family and friends “you guys are doing so much better now, aren’t you going to sell this house and move into a bigger one in a nicer area?” Our response has always been the same “this house was fine for 5 of us for many years, why would it not be big and fine enough for 3 of us (and 2 soon as our younest is almost 20). We simply love our home. It not just a house, it is a home. People tell us all the time how cosy and inviting our home is so why would we want to change that? Every year we upgrade/renovate using my alternating what needs to be done inside and out. My husband is very handy and luckily does all the work himself which allows us to be able to afford to do more by not paying contractors. Compliments of my talented husband I have a new laundry room just completed in January and now we are totally renovating our living room. Simply cannot see any need to want to move into a bigger more expensive home that would leave us “house poor”.
April 23, 2012 at 10:27 am
Gail,
What is interesting to me is that when people think about buying a new, larger home, they often forget that they have more space to fill – and that means more stuff and additional expenses.
April 23, 2012 at 11:28 am
My husband and I live in a fairly small, older home in a “transitioning” area. I bought there because I saw the potential in the house and area. I paid a lot less than most were paying for houses at that time. It needs some work, but I find it enjoyable to work with my husband and my dad (a carpenter) on the house. We added a deck last year for a fraction of what it would have cost to have a contractor do it. For me, it was the land—-the yard—-that appealed. New homes are HUGE and have TINY yards….what’s the point of that? Nah, I would rather have a bit less house and a bit more land. And we’ve barely bought any furniture—-we keep getting stuff that others want to get rid of because they are moving or whatever! I just got a beautiful hutch that someone was giving away
At any rate, our mortgage is not killing us and once we have the consumer debt gone, I want to make it go away as quickly as possible. And I do see a home as an investment—-other investments can experience ups and downs and not be at the level you’d like when you need them. With the recent recession, a lot of folks experienced that with their investments. I think the key, as someone mentioned, is DIVERSITY. Don’t make your home your ONLY investment.
April 23, 2012 at 11:40 am
“Lord love a duck” you tell it like it is! Love that.
April 23, 2012 at 11:47 am
Yep, had that advice have spent the last 3 years trying to keep a house we can’t afford with 3 count em- private mortgages at 11%. Finally said we were tired of not having anything but a house and now we can’t sell it- lol- been on the market since December.
There is a lot more to the story but yes, sometimes you have quit trying for what you want and realize the true cost of what you have.
April 23, 2012 at 11:49 am
When I was a child, we lived in a large brand new home. When relatives from England came to visit one day they asked my father “how many families live in this house?!” They couldnt fathom a family of four needing such a giant house.
4 years after buying the home, my parents divorced and each moved to a much smaller, more affordable home. Which they have each now lived in for over 20 years! Their mortgages are paid off, they have retired early, and are even looking to renovate. As empty nesters now they see no need to have a bigger home and BOTH have expressed the desire to one day move into an even smaller home for less maintenance.
As for myself, I grew up quite happily in both homes. Now I live in a 400 sq ft bachelor condo (which I saved up for an bought at age 23) and I really dont see myself buying a large home for my family one day either!
April 23, 2012 at 12:30 pm
I am a full time realtor and have been for almost 20 years
I tell clients that your home is Not an investment, it is a home and hopefully it will become your Nest Egg. If you want an investment, buy a commercial building or speak to your investment councilor about your options.
Your home is your place of refuge. A warm and comforting place that is Yours. You are buying it for yourself and your family, not for the friends who have the “bigger and the better”
Being able to walk in your front door , kick off your shoes and feel Home, without having to panic about where the next mortgage payment is coming from is makes it your Refuge.
As far as renting goes, I do not believe you are throwing your money away if it is the right choice for YOU. You always need to do what’s right for You and yours. And for many people, renting works.
April 23, 2012 at 12:37 pm
There are a lot of young people looking at the US housing crisis, and thinking, ‘that’s stupid’. There are several minor movements afoot, from building tiny houses, to building not-so-big-houses, to renovating post-war >1000 sq. ft. mid century modest houses. I think the next 20 years will be very interesting in the housing market, because the desire to own a house won’t go away, but those who are growing up right now will know deep in their bones that too much house could be dangerous.
April 23, 2012 at 12:49 pm
Lynne is right. In some markets, like mine here in the GTA, the cost of ownership is so high that it simply is unattainable for many people. Even one-bedroom condos here go for $500,000+. It is just not a realistic goal. My partner and I rent a huge apartment for about $1500 a month and we know 100% what are expenses are, no surprises like sudden repairs or special maintenance fees. So we can budget the rest of our money and afford to put into savings, RRSP, a vacation fund and all sorts of things. I would rather be life-rich than house-poor!
April 23, 2012 at 1:00 pm
My husband wants so desperately to own, because he still believes that a home signifies success, comfort, and reliability. I cannot get through to him on this, and have reconciled myself to the fact that sometimes we want things emotionally, even though logically they are a poor financial choice (having children comes to mind here too), and that loving him means supporting his goals even if they aren’t what I would choose. So, if he wants to own that badly, we will own, but I cringe at the thought. At least we’re both in agreement that a tiny house is best for us, and that we shouldn’t buy until we’re ready to stay put in one location. I view home ownership like other people view renting: what a waste of money. I’m pretty young though, so maybe that has something to do with it… I don’t remember a time when houses weren’t unaffordably expensive.
April 23, 2012 at 1:40 pm
I don’t think of ‘rent being cheaper than own’ in terms of direct comparison of how much it costs monthly, because the ‘own’ one is refundable when you sell the place. It could still be better to rent once all math is done, but it’s not just because it is cheaper/month.
And nice to see all responsible real estate agents posting here
Don’t know where these people are in real life. The ones I’ve worked with were very much ‘high pressure at top end of our range and then some’ type of agents who sell you what you were not originally looking for at more than what you originally wanted to spend. 1st meeting with any Toronto real estate agent, and a ‘bidding war’ will be presented as more or less the NORm, THE ONLY way you will get to buy a place, so get your deposit ready and don’t question the process. I chose not to participate in that nonsense, but I can totally see how people would get trapped, especially young professional couples starting out. And yes, ok, they should be ‘doing their homework’ but at the same time they hired these supposed professionals for supposed professional advice, not six figure high pressure, high hype used car sales pitch.
April 23, 2012 at 2:00 pm
I’d love nothing better than to sell our house and downsize to a rental apartment. Trouble is my husband expects to be there for the rest of our days. I was originally in agreement, but now all I can see is the equity sitting there staring at me. We replaced the roof last year ($18k); the windows are 20 yrs old and were $22k when they were installed. I shudder to think what replacing them will cost. Then there’s the septic system, etc etc. Our property taxes and utilities are $1100 per month. I could rent a perfectly lovely all-inclusive 2br apartment for that. Getting our hands on the equity would mean retiring in about 3 years instead of 10+. Yes it’s been a lovely place to raise the kids but at this point all I see are the lost opportunities of having so much equity tied up. Considering rent as money thrown away is nonsense in my opinion. I can easily rent something suitable for less than my property taxes and utilities, and those won’t be going away or getting any cheaper as time rolls on. Yes rent allows you to live there for the month and at the and then the clock starts ticking on the next month. Property taxes and utilities are just the same. It’s just different money gone in order for you to live there for another month. Try missing your tax payment and see if the city or hydro company are anymore understanding than a landlord.
I think the problem lots of folks get into with renting is that they aren’t investing the money saved by renting, they just blow it on lifestyle upgrades. And that’s fine if you’ve consciously made that choice. I’ve done the math and if 25yrs ago we’d stayed in the apartment he had when we married and invested the difference between that and our mortgage payments we’d actually be slightly ahead. Who knows if we’d have actually put all the savings into our RRSP, but the math says the “invesment” of ownership wasn’t any better than renting. It just gave us a nicer place but with a lot more headaches.
April 23, 2012 at 2:05 pm
I especially like your point about calculating the amount of interest paid monthly to service debt. Many of us just look at the payments we make each month to mortgages, credit cards and lines of credit and feel like we are paying out a lot, so we must be making progress.
But that mortgage payment which is half interest plus a few hundred in property tax really isn’t that impressive. And the amount we pay in interest for credit is a shame. So part of any honest assessment of our finances has to be, what percentage of my income is going straight to pay interest, and how much is actually being paid to reduce debt? If the first figure doesn’t scare you, it probably should.
April 23, 2012 at 3:11 pm
Gail I hear you. I am a realtor and lord love a duck lol people are way in over their heads. We will see a correction starting in about 2 to 3 years when all these 5 year mortgages start to renew and the payments jump hundreds of dollars with the new average rates. I see many people putting down the minimum and just getting by per month. They are not saving for rrsp, vacations, new car when the will need one or anything g else that will come up. A shock of a higher payment in the near future will force people to list the home/condo when the line of credit is maxed. Our correction here will be nothing like the states but will be a shock for the Canadian mentality. As for renting, it is the right thing for many people. When I hear people compare the two everyone seems to just look at mortgage payments vers rent payment! What about all utilities, taxes, yearly maintenance and the large expenses like windows roof ect. Some people have no idea and when crap hits the fan in a few years just hold on for the ride
April 23, 2012 at 3:53 pm
And this is why we don’t own a home yet. We are starting to look and starting to get to a point where it looks doable in our future but despite comments for years from people about how we are wasting our money renting, we continue to rent. With a tiny bunaglow, in the neighbourhood I rent in, selling for $500K, it is not realistic to buy where we live. If at some point in the last few years we’d been able to scrape together a down payment in a town 45 minutes away, we would have been beyond house poor!! I would love to buy, and plan to when the time is right, but we have lived paycheque to paycheque for too many years and buying a home while living that way would have been downright stupid. Now, when we do buy, we will be ready, and will make sure we don’t leave ourselves house poor.
April 23, 2012 at 4:02 pm
I’ve been renting for 6 years since my divorce, after having to sell my home to divide the proceeds. Some days I wish I owned my own home, but I worry about losing my job and not being able to find another at age 57. On the plus side, I do rent a really nice condo and am thankful for what I have.
April 23, 2012 at 6:38 pm
Wow Gail! I literally said a little prayer today that you would talk about this and TADA – you read my mind! THANK YOU!
I have been going back and forth on the idea of moving since last year and could use anyone’s input!
I purchased my home myself – was perfect for me. Fast forward – now hubby and 2 small children later, I am concerned as the kids get a bit older we will have outgrown the space. There is not a ton of living space but the bedrooms are great! However, we are in a townhome and the neighbours on one side are wonderful! On the other is someone who rents and doesn’t really seem to care about the upkeep and that bothers me. Also, I have been feeling some pressure to buy from people (including colleagues) who say “the rates are low, now’s the time before they go up” and “you will need more space”.
Hubby on the other hand does not want to move. He makes some good points including that he doesn’t want to be in his retirement years continuing to pay down a mortgage since we would be taking on a bigger mortgage, even with a good down payment.
I go back and forth. I listed my reasons for moving but on the other hand, I also want us to have a lifestyle and my kids to enjoy activities. Hubby brought up the point too that what if the kids get really good at certain activities and want to pursue them competitively? That costs. I would also love to own a cottage someday…..
So here I am torn between two worlds….is it the time to make a move now or sit back and wait awhile to see what happens (especially with the housing market)? I calculate stuff out so I would not be one of the ones that bites off more mortgage than we can chew! But here is the question: should I stay or should I go?
There are so many people that contribute to this blog that have figured it out financially that it’d be nice to get some feedback. And I love the realtors’ input on here since the ones I’ve spoken to briefly want us to go above my idea saying “the rates are so low!”
April 23, 2012 at 6:41 pm
Sorry – I should clarify – “idea” means my limit for a mortgage.
One other point: we have put a lot of work into our home and it’s cozy even if it’s small. I like that others pointed out the European perspective – I like to think of that often. Many people around the world would think our space is a mansion!
April 23, 2012 at 6:45 pm
I do own a large house, which I got 2/3 paid for in a divorce. Here in the states it’s not worth selling right now, so I just enjoy it. Besides needing extra furnishings like someone said, I think the bigger issue is how much more utilities cost for a large house. Even for one person, you still have the expense of heating and cooling. Property tax is $300. a month. If it needs a new roof, it’s a lot of roof, etc. I wouldn’t have taken on this much house, but had already been living here 21 years and was used to handling getting home repairs, etc. done. I am limited to something with no stairs, so this big rancher does fit the bill. Starting from scratch it wouldn’t have been the smartest move, but there you go.
April 23, 2012 at 7:00 pm
Mees, I agree with your husband – better to have extra funds to pay for fun stuff than to buy a larger house and be less free financially. Cozy is good!
My condo is paid for and I still wince every month about the HOA fees, taxes and utility bills that just keep going up, up, up faster than my paycheques are going up. I wonder if some day I will have to sell because I can’t keep up with the increases. Hopefully that won’t happen but I do think about what I would do at that point. Inflation is killing us all.
April 23, 2012 at 7:18 pm
I own my house, and several others, and I look so enviously at other people who aren’t tied down. I fantasize about being about to lock an apartment door and leave – without worrying about furnace, roof, pipes, snow clearing, lawn mowing… God, it goes on and on. Home ownership is lovely if it fits with your lifestyle, but there are so many other lovely, civilized ways to live. I wish we would stop trying to convince everyone that they need to tie themselves down.
April 23, 2012 at 8:13 pm
It’s amazing how many people out there think bottom of the barrel interest rates will last forever. Many people between 20 to 30 years old that don’t think there is a difference between a mortgage term and an amortization period. I have personnaly had to tell many of my friends that, yes, they will have to eventually renegiotiate their mortagage at the end of their term.
The way I look at it is this: When the interest rates finally starts to rise (and they will), my husband and I will have our downpayment ready. The ones that are overextended will be forced to sell at a much lower price. I know it sounds a little cold, but to buy a house at a reasonable price, we will be waiting for the market crash.
We don’t quite have it saved away, but that’s okay, I estimate that the crash will take a couple years (time it will take for the first few to get to the end of their terms). I may pay an average interest rate (instead of super low), but I will have a house that the mortgage matches the true value of the home. Until then, we rent.
If I had not learn Gail’s lessons so well, I might have been on the other side.
April 23, 2012 at 8:30 pm
Your system in Canada is so different from ours! Here, you try to get your mortgage set up in a low interest time with a 15-30 year fixed rate. If interest rates go down, you refinance and have to pay settlement costs on the loan, but you can lock in the new lower rate at that time. All the rest seems pretty similar, getting a bigger loan than is smart, property taxes, etc,
April 23, 2012 at 9:39 pm
Thanks for your feedback Tara! I appreciate it and you make a good point! I agree about inflation – I worry most about people (like my parents) who are retired living on a fixed income – costs keep increasing but their income doesn’t! Hang in there!
April 24, 2012 at 1:50 am
While I appreciate this post and many of the comments, I must bring another view. Just because someone is living in an expensive house, it does not mean it is a mansion. We live in the outskirts of vancouver where a very modest house costs close to $500,000. These are not upscale houses!! And I would argue that these aren’t people being greedy.
Unfortunately rental prices are also high, but yes, sometimes a little more reasonable.
Where I think most couples struggle is when circumstances change. For example, many couples will buy a house using both incomes, and then have kids. Well, suddenly both spouses aren’t working full time any more. Even if they choose to work full time, they need to pay big daycare fees- it is at least $1500 for 2 kids in ft daycare.
I don’t think many families consider these factors when they choose their house.
April 24, 2012 at 8:21 am
@Mees. I also agree with your husband. When we were married we based our mortgage on 1 income, because i knew that i wanted to be able to stay home with our children, and work part time for ‘extras’. Well, over the years, with the costs of competitive activities for the kids, home improvements, vehicles, farm expenses, rising prices, ect., not to mention upcoming university costs, we are so glad that we stayed with our cozy home-and when the walls are closing in, you go outside! How we do things has worked for us and that is how we’ve always looked at it, and really that’s what matters. No regrets!
April 24, 2012 at 9:57 am
@ Jen – you made the point I was going to – that size really doesn’t matter. I live in Toronto and here my 1200 sq. ft house is worth about $600,000. My brother’s house in east oshawa is probably worth around $400 and it’s 3000 sq. ft. Location location location.
April 24, 2012 at 10:19 am
@troar Well….I’m sorry so many Realtors out there are opposite to the few of us who post here….I joke that I will never be a mercedes-driving agent because of my views and the care I invest in my customers…and I don’t care. Come to Hamilton I’ll help you! LOL our homes are affordable!
I wanted to make a point as well to those who mentioned that your monthly (or bi weekly or weekly) payment for your mortgages don’t always have to include the property taxes. You don’t have to pay those included, you can separate your taxes and pay direct monthly or semi annually to the city direct. We do that and it’s easier overall. Also make sure you know your mortgage insurance term and plan and what it covers…many are not great and you’d be surprised what little they cover. Cover those things in your regular insurance policies or add to them. I find people just take on whatever plan for payment is given and they don’t really delve into how much is going where, what it all means etc. Be curious!
April 24, 2012 at 5:35 pm
@Joey – thanks for your advice! I appreciate the input from someone who’s kids are older too since mine are still so young. You have some insight into what’s coming up! My only pet peeve is being directly connected to someone who doesn’t care about the house – that makes a big difference as does being connected period! Discovered that when we had to have some roofing done!
However, you have some good points and I do tell myself that if I were a single parent, I’d be staying put so what’s the difference? Still, it would be nice to be detached.
By the way, I love this line: “When the walls are closing in, you go outside”
April 24, 2012 at 8:08 pm
@Mees-also good for you for making that purchase on your own initially! I was just thinking how a friend laughed at me when i said that i didn’t want to build a big house because we only have 2 kids (about 5 & 8 yrs at the time) and before you know it they would be going to university, or college, or whatever. Here we are 10 yrs later and there will be 3 of us for 8 mos/yr-extra space for awhile! I guess some of us just prefer cozy spaces and others prefer big. I hope your attached neighbor improves-that must be frustrating.
April 26, 2012 at 9:57 am
@Troar, if in the future you decide to buy, ask someone you respect for a Referral to a Trustworthy Agent. We are out there, you just have to ask around.
@Mees, even if you moved, there are Never any guarantees that your new neighbours would take care of their property. As for the size of your home, we have a 700 Sq Ft Toronto home and we’ve got two teen daughters (16+17). We now have a 3rd bedroom in the basement but Up until last year they shared a bedroom. If friends asked why we didn’t get a bigger house so they could have their own rooms, I would say “I share my room, they can share theirs”. We also only have one TV (in the finished rec room) and we are all perfectly happy to watch the same program Together. We live a modest lifestyle, but have A Lot of Fun TOGETHER. (I also cannot imagine trying to keep a Big house Clean)
April 28, 2012 at 7:54 pm
@ Joey and Sylvia
Thanks again for the feedback! I keep checking back when I have time. Thanks Joey – it did feel really good to be able to buy on my own. One of the positives about this place – even though costs have increased significantly with 2 kids (1 still in full daycare) and hubby, we could still afford to keep it if hubby lost his job. It’d mean giving up some other stuff but we wouldn’t lose the house.
Thanks for the wishes about the neighbour! It was so much nicer with the family who lived there previously….sigh. Problem here is that most consider these “starter homes” and in a unit of 6 Freehold townhomes, there are only 2 of us still here from when I originally moved in 8 years ago. Sad, isn’t it? Maybe that’s part of it – I feel peer pressure to move on too!
Sylvia – that makes me feel better! Everyone is always going on to me about how 1200 sq ft is not large enough for 4 of us (everyone except hubby that is – this is the biggest place he’s ever lived in!). I have to remind myself that around the world people live quite contently with less space. Kudos to you for building a room in the basement! Your daughters must be thrilled! We have enough bedrooms for everyone and they are a good size so we’re fortunate in that sense.
I get what you are saying about less than desirable neighbours anywhere but I admit, I do wish quite often we were not attached. It makes a big difference! When the neighbour and significant other have all their children together (not every weekend as the kids are from previous relationships) – it can drive me crazy with all the loud banging on the walls! Never heard a peep from the previous neighbours nor the ones on the other side of us (whom I love – they are great!)
I really appreciate the comments I have gotten back! They have been most helpful!
April 28, 2012 at 8:11 pm
One more point – it makes a big difference too when 5 of us own our homes and 1 does not. The landlord is all about making money from it too.
April 29, 2012 at 11:14 am
I prefer owning to renting, with one caveat: I don’t believe in owning more house than is needed. We bought a small house in a lovely older neighborhood in Edmonton when we were grad students; at 655 sq ft, it was enough for us, our dog, and cat. Honestly, that house helped us make the most wonderful memories, including many friends and family sleeping on any available horizontal surface after a great party or family event
Many of the houses of the same vintage in our neighborhood were being torn down, so that larger houses could take their place. When I saw them, all I saw were higher heating bills, more space to clean, and a smaller yard. We recently sold our house, and moved across the country for work; even though we’re no longer grad students on a tight budget, I still maintain that I don’t need a huge space to be happy. I just want a yard for a vegetable garden, and room for my pets 
My two cents’ worth 
April 29, 2012 at 8:57 pm
Finally.
I’ve never said that owning a house has ever been a bad thing, but I’ve always tried to tell people that owning a house is not the be-all and end-all, and it is NOT A retirement plan or a guaranteed investment.
Rent is also never throwing your money down the drain — I see it as paying for a plumber, utilities, things to work, shelter, and elevators — all the things you have to do yourself and pay for, yourself, as a homeowner. I’m paying for the privilege of not having those worries.