Give Me Back My Five Bucks

My biggest home buying regret: not fully considering the future

I’ve made a lot of financial mistakes over the years (which is kinda why this blog exists in the first place), but I never thought I’d consider anything related to buying my first home to be a mistake.

Let me backtrack a little bit.

Just over four years ago, I found myself single, with a good job (plus lots of freelance work), and a $50,000 down payment. I had always imagined buying my first home with a partner, but when I was ready to buy and found no man by my side, I thought: why should that stop me? I worked so hard the previous 6 years to get out of $20,000 worth of debt, save up a $10,000 Emergency Fund, as well as a large enough down payment, I knew I could do it on my own. So that’s what I did. :)

I found myself a Realtor and went house hunting. Within a few weeks, I found exactly what I was looking for: a cute 1-bedroom townhouse in a great neighbourhood. After a few rounds of negotiation, we settled on a price which was well under the mortgage amount I was approved for (and the budget I had set for myself), even before my down payment.

Things moved quickly, and soon I was in my new home. I was making extra payments towards the mortgage, saving money, and having fun exploring my new neighbourhood with my new friends. My office moved to a new location, and all of a sudden, my commute to work was 15 minutes. Life was good.

Little did I know that by the end of that year (8 months after moving in), I’d be quitting my job and moving to Europe.

Moving to Europe was one of the best experiences of my life. I learned how to hustle as a full-time freelancer, and I got to explore so many different countries. However, it wasn’t good on my finances, as I had to continue paying my mortgage while I was away, and had to significantly scale back on my retirement contributions.

Now that I’ve had my home for 4+ years, I’m finally starting to think about selling it. My home, as lovely as it is, just doesn’t fit my lifestyle anymore. My plan had always been to re-evaluate my living situation after my 5-year mortgage is up, but now that I’m almost there, I find myself wondering if it was all worth it.

I spoke with my Realtor just a few weeks ago, and based on recent sales history in my area, he thinks I’ll be able to sell for more than what I paid for it. After running my own numbers, I’ll likely come out ahead over renting during the same period of time. So, that makes me happy. But I wish I had considered whether my life was really settled by the time I was ready to buy. I thought it was, but clearly it wasn’t.

That being said, I really do love my home, and I’ve had a lot of great home ownership experiences so far:

  • I borrowed a manageable amount of money for my mortgage
  • I kept early retirement goals in check
  • I kept savings in the bank
  • I’ve met a lot of really great people in my neighbourhood
  • I learned how to deal with a strata council (pros and cons)
  • I learned how to be happy living on my own
  • I went through a successful renovation project

Thankfully this “mistake” (likely) will end up as a positive outcome for me financially, but it certainly has made me re-evaluate where I want to live going forward, and that as a single female living in an insanely expensive city like Vancouver, renting is probably what’s in my future.

Author: Krystal Yee

I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.


Comments

  1. I still wouldn’t consider this a mistake – and I’m not just saying that as your friend. Nobody knows what the future will hold. At the time, you thought you’d stay in that area for at least 5 years, but life/work took you down a different path. People transfer mortgages around for that exact reason all the time. Now, I will say, this is exactly why homeownership isn’t even on my radar. I have no idea where I want to live for the next 5 years, haha. Let’s just go build tiny houses. :)

  2. Yes, that’s definitely one of the biggest challenges with home ownership: trying to guess the future. You tend think that you’re going to remain in one spot longer than you’re likely too.

    I’m glad it worked out fairly well for you in the end though and didn’t end up costing you much.

  3. Vivien says:

    rent out to trusted people/relative/family?

  4. Even if you don’t come ahead, this is not a mistake, it’s a learning experience since you know what you want. Then again, in another 5-years things could change again. That’s just life :)

    Mark

  5. ARBM says:

    It definitely doesn’t sound like it has turned out to be that big of a mistake. Yes, it may have not been the easiest of routes, but if everything was easy, we wouldn’t learn anything!

  6. Ha ha ha… Call that a mistake?!

    A mistake is buying your first house solo, your job being made redundant shortly after AND interest rates reaching 18%!!! That was my experience. Man… it was tough but I learned a lot of valuable lessons during that nightmare experience.

    I think you’ve done really well and making the decision to buy the property probably meant you didn’t burn through all your resources while you were in Europe.

    Besides, no-one has a crystal ball so you can never know what’s around the next corner.

  7. Liquid says:

    You’re coming out ahead rather than renting for the same period. You’ve gained some important life experience. Seems like it was all for the better. :)

  8. Kristy says:

    Hi Krystal, I’m a long time lurker on your blog – I remember when you bought because I was so jealous! I was saving for a place of my own at that time and bought about six months after you.

    I don’t think you buying a condo at that time was a mistake but rather that you bought one with rental restrictions, and possibly the location could have been better. While you say it is a great neighbourhood, I get the impression it is further away from downtown that what you would have liked now.

    I get the feeling you’ve really been living life more in the past few years which is wonderful to see, and social lives usually revolve around cities rather than the suburbs.

    My advice would be to find a nice boy, date him, get him to move in pay a bit more off the mortgage and then look to upgrade together!

  9. Byrocat says:

    I agree, this isn’t a mistake. A life lesson, yes, but not a mistake. Houses are LONG (emphasis) term investments. Seems that you’ll be coming out ahead of the game and found out what your likes and dislikes are.

    Find what pleases you and makes you happy, consider all the variables, and make a decision on that basis.

    Also, don’t over-think the process. What-if-ing yourself to death. Put together a shopping list and approach your realtor about it. See what they come up with and work from there.

  10. SP says:

    I remember long ago when you were buying, and it made sense, given the information you had at the time. If you are coming out ahead financially, there is no reason to think of it as a mistake. It was just a choice you made, one that made sense when you made it.

    Good luck on the selling – it must be very bittersweet!

  11. When it comes to my home, I have an old school mentally. Although it probably makes sense to pay down my my mortgage and contribute to my RRSP, I’ve been focused on my mortgage. Once I’m mortgage-free in October, then I can catch up.

  12. Ramona says:

    I actually see no mistake at all. You didn’t borrow too much, you saved money and now you have a decent piece of estate instead of just renting for years and getting nothing in return. You did amazingly well and are a good example for us all :)

  13. Dan says:

    Nothing wrong with changing circumstances in life, you can only forecast so much and can’t predict exactly what will happen. I read a stat last week that said most people live in their home on average of 6.5 years so this would make sense

  14. Suzanne says:

    Did you and your boyfriend break up?

  15. kdndollar says:

    I also do not think this was a mistake in the grand scheme of things. As everyone said, you bought within your means. The property is appreciated in value, and you’ll pocket that increase. I think owning is always better than renting though – it’s a truly long term vision, shelter is a non negotiable in life. I don’t want a huge portion of my retirement money paying a landlord, and I wouldn’t want to pay a landlord for years until decided to re-enter the market. Interest is low now, prices wont decline.. (see major cities like NYC) values will become more inflated, so if you can stick it out with owning I think I you will come out ahead in the bigger picture.

  16. R says:

    My big house buying mistake was buying less than a 3 BR with a family. We quickly outgrew the house and now have to rent it out because it’s under water :(

  17. I once made a similar mistake about buying a house but we rented it and it ended up being a great mistake. The equity you gain is amazing!

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